Saturday, 3 July 2010

US employment and factory orders fall, India raises interest rates

The US non-farm payrolls report on Friday confirmed concerns that the underlying employment trend remains weak. MarketWatch reports:

Total nonfarm payroll employment fell by 125,000 in June as the number of temporary census workers dropped by 225,000, according to the Labor Department. This is the first decline in nonfarm payrolls this year...

Private hiring edged up by a disappointing 83,000 in June from a revised 33,000 increase in May, originally reported as a 41,000 gain...

The nation's unemployment rate fell to a seasonally adjusted 9.5% in June from 9.7% in May, according to a separate survey by the government of 60,000 households...

But the decline wasn't particularly good news because it reflected 652,000 people dropping out of the labor force...

And to add to the concerns for the economy, manufacturing may be losing some of its earlier strength. Bloomberg reports:

Orders placed with U.S. factories declined in May more than forecast, a sign that manufacturing may be starting to cool.

The 1.4 percent decrease in bookings was the biggest since March 2009 and followed a revised 1 percent gain in April, the Commerce Department said today in Washington. Economists forecast orders would drop 0.5 percent, according to the median projection in a Bloomberg News survey.

Meanwhile, in the euro area, unemployment was unchanged in May. Again from Bloomberg:

European unemployment held at the highest in almost 12 years in May as the debt crisis made companies reluctant to add workers.

The jobless rate in the 16-nation euro area remained at 10 percent, the European Union’s statistics office in Luxembourg said today. That’s the highest since August 1998. The April figure was revised down from a previously reported 10.1 percent. Producer-price inflation accelerated to 3.1 percent in May from 2.8 percent in April, a separate release showed.

While high unemployment is the main concern in the US and Europe, high inflation is the concern in many emerging economies, including India. From AFP/CNA:

India's central bank on Friday hiked two key short-term interest rates by 25 basis points in a bid to tame double-digit inflation.

The Reserve Bank of India (RBI) said in a statement on its website that the decision was taken before its scheduled July 27 meeting "to contain inflation and anchor inflationary expectations going forward".

Governor D. Subbarao said the repo -- the lending rate to commercial banks -- has risen to 5.50 percent with immediate effect while the reverse repo -- the rate the central bank pays to banks for deposits -- is now 4.0 percent.

No comments:

Post a comment