|
|
| World Home » Business » | Fri. May 16, 2008 |
 |
|
|
||||||
|
Unemployment Sounds Warning About US Economy MIL/NYT, Jan 5, 2008. Washington: January 5, 2008 – As per Labor Department’s report, the unemployment rate surged to 5 percent in December as the economy added a meager 18,000 jobs, the smallest monthly increase in four years. Economists viewed the report as the most powerful indication to date that the United States could well be falling into a recessionary downturn. Evidence of widening unemployment heightened anticipation that the Federal Reserve would further cut interest rates this month, perhaps by an unusually large half a percentage point, in a bid to prevent the economy from sliding into the muck. “This is unambiguously negative,” said Mark Zandi, chief economist at Moody’s Economy.com. “The economy is on the edge of recession, if we’re not already engulfed in one.” A recession is typically defined as an extended period of at least several months during which economic activity shrinks and unemployment rises. The swift deterioration in the job market resonated as a warning sign that troubles once confined to real estate and construction are spilling into the broader economy, threatening the ability of American consumers to keep spending with customary abandon. On Wall Street, the report led to a big sell-off that sent the Dow Jones industrial average plunging nearly 2 percent. As the presidential race heated up, Democrats seized upon the bleak job numbers to indict Republican-led economic policies. “This morning’s jobs report confirms what most Americans already knew,” Nancy Pelosi, the House speaker, said in a statement. “President Bush’s economic policies have failed our country’s middle class.” President Bush cautioned that “we can’t take economic growth for granted” and said he would work with Congress to be “more diligent” on protecting the economy. Speaking to reporters at the White House after a meeting with his economic advisers, Mr. Bush warned that “the worst thing the Congress could do is raise taxes on the American people.” The lone consolation for investors, workers and the public at large was that the bad news seemed severe enough to prod the Fed to push its benchmark rate below its current 4.25 percent when policy makers meet at the end of the month. Lower interest rates decrease borrowing costs and encourage banks to lend more freely, spurring spending, hiring and investment.
|
 |
|
Applelounge Network (Website Design India, Web Design India) Sites |