The worst is over for the global economy and a recovery is likely to begin later this year, says a bank report released here.
The global economic crisis has bottomed out and positive indicators have begun to emerge, said the report by the Royal Bank of Canada which is the top bank in the country. It said there were encouraging signs for global recovery as the US economy was showing signs of recovery after worst-ever declines in its GDP in the last quarter of 2008 and the first quarter of 2009.
Thanks to low interest rates, an easing in credit crunch and Obama's fiscal stimulus package, the US housing market is already showing some stability, it said. This, coupled with rising consumer confidence, hints at a moderate recovery for the US economy by the second half of 2009, the report said.
"The benefits of significant fiscal and monetary policy stimulus (in the US) are starting to have traction," said RBC chief economist Craig Wright. He said, "There is an unprecedented amount of money bolstering the world economy."
"What we will be watching is the impact this spending has on labour markets, as well as household and business confidence. The degree of impact will be a crucial factor in shaping economic recovery."
Though the recession has thrown six million Americans out of jobs - pushing the unemployment rate to a record 9.4% in 25 years, the recent data suggests that this rate has started declining, the report said.
It said home sales in the US are also poised to pick up as affordability improves.
But the most potent indicator of the onset of recovery was that US consumer spending has increased after six months of decline.
This trend will continue in the second half of 2009 because of low interest rates, firmer credit markets and fiscal stimulus, the report said.
About Canada, the report said its economy will shrink by 2.4% this year. With over 360,000 jobs lost nationwide since October, consumer confidence will remain low as the unemployment rate peaks at 9.2% by the end of 2009.
The report forecast that the Canadian dollar, which has rallied 15% since March, will hover between 85 to 92 cents US for the remainder of this year.
Agencies
Showing posts with label stimulus package. Show all posts
Showing posts with label stimulus package. Show all posts
Tuesday, June 16, 2009
Friday, April 3, 2009
Despite hope of recession easing layoffs rise
American employers are laying off workers at a faster pace despite a few hopeful signs recently that the recession, now the longest
since World War II, could be easing.
The Labor Department on Friday is slated to release a report expected to show that a net total of 654,000 jobs were lost last month. That's more than the population of Baltimore.
If economists are right, it would mark a record four straight months that job losses topped 600,000.
``It's going to be another month of gargantuan jobs losses,'' predicted Stuart Hoffman, chief economist at PNC Financial Services Group. ``Companies were slashing jobs and not filling vacant positions.''
With employers axing payrolls, the US unemployment rate is expected to jump to 8.5 per cent, from 8.1 per cent in February. If that happens, it would mark the highest jobless rate since late 1983, when the country was recovering from a severe recession that drove unemployment past 10 per cent.
As the recession, which started in December 2007, eats into their sales and profits, companies are laying off workers and resorting to other cost-saving measures. Those include holding down hours, and freezing or cutting pay, to survive the storm.
Looking forward, economists expect monthly job losses continuing for most, if not all of, this year.
However, they are hoping that payroll reductions in the current quarter won't be as deep as the roughly 650,000 average monthly job losses in the January-March period. In the best-case scenario, employment losses in the present quarter would be about half that pace, some economists said. That scenario partly assumes the economy won't be shrinking nearly as much in the present quarter.
Federal Reserve Chairman Ben Bernanke said the recession could end later this year, setting the stage for a recovery next year, if the government is successful in bolstering the banking system. Banks have been clobbered by the worst housing, credit and financial crises to hit the country since the 1930s.
Even if the recession ends this year, the economy will remain frail, analysts said. Companies will have little appetite to ramp up hiring until they feel the economy is truly out of the woods and any recovery has staying power.
Given that, many economists predict the unemployment rate will hit 10 per cent at the end of this year. The Fed says unemployment will remain elevated into 2011.
Economists say the job market may not get back to normal _ meaning a 5 per cent unemployment rate, until 2013.
``There's going to quite a long haul before you see the jobless rate head down,'' said Bill Cheney, chief economist at John Hancock Financial Services.
To brace the economy, the Fed has slashed a key bank lending rate to an all-time low and has embarked on a series of radical programs to inject billions of dollars into the financial system.
And the Obama administration had launched a multi-pronged strategy to turn the economy around. Its $787 billion stimulus package includes money that will flow to states for public works projects, help them defray budget cuts, extend unemployment benefits and boost food stamp benefits.
The administration also is counting on programs to prop up financial companies and reduce home foreclosures to help turn the economy around.
On the economic front, some glimmers of hope have emerged recently.
Orders placed with US factories actually rose in February, ending a six straight months of declines, the government reported Thursday. Earlier in the week, there was better-than-expected reports on construction spending and pending home sales. And last week a report showed that consumer spending, an engine of the economy, rose in February for the second month in a row, after a half-year of declines.
Still, skittish employers announced more job layoffs this week. 3M Co., the maker of Scotch tape, Post-It Notes and other products, said it's cutting another 1,200 jobs, or 1.5 per cent of its work force, because of the global economic slump. Fewer than half the jobs will be in the US, but include hundreds in its home state of Minnesota. The 1,200 figure includes cuts made earlier in the first quarter.
Elsewhere, healthcare products distributor Cardinal Health Inc. said it would eliminate 1,300 positions, or about 3 per cent of its work force, and semiconductor equipment maker KLA-Tencor Corp. said it will cut about 600 jobs, or 10 per cent of its employees.
Agencies
since World War II, could be easing.
The Labor Department on Friday is slated to release a report expected to show that a net total of 654,000 jobs were lost last month. That's more than the population of Baltimore.
If economists are right, it would mark a record four straight months that job losses topped 600,000.
``It's going to be another month of gargantuan jobs losses,'' predicted Stuart Hoffman, chief economist at PNC Financial Services Group. ``Companies were slashing jobs and not filling vacant positions.''
With employers axing payrolls, the US unemployment rate is expected to jump to 8.5 per cent, from 8.1 per cent in February. If that happens, it would mark the highest jobless rate since late 1983, when the country was recovering from a severe recession that drove unemployment past 10 per cent.
As the recession, which started in December 2007, eats into their sales and profits, companies are laying off workers and resorting to other cost-saving measures. Those include holding down hours, and freezing or cutting pay, to survive the storm.
Looking forward, economists expect monthly job losses continuing for most, if not all of, this year.
However, they are hoping that payroll reductions in the current quarter won't be as deep as the roughly 650,000 average monthly job losses in the January-March period. In the best-case scenario, employment losses in the present quarter would be about half that pace, some economists said. That scenario partly assumes the economy won't be shrinking nearly as much in the present quarter.
Federal Reserve Chairman Ben Bernanke said the recession could end later this year, setting the stage for a recovery next year, if the government is successful in bolstering the banking system. Banks have been clobbered by the worst housing, credit and financial crises to hit the country since the 1930s.
Even if the recession ends this year, the economy will remain frail, analysts said. Companies will have little appetite to ramp up hiring until they feel the economy is truly out of the woods and any recovery has staying power.
Given that, many economists predict the unemployment rate will hit 10 per cent at the end of this year. The Fed says unemployment will remain elevated into 2011.
Economists say the job market may not get back to normal _ meaning a 5 per cent unemployment rate, until 2013.
``There's going to quite a long haul before you see the jobless rate head down,'' said Bill Cheney, chief economist at John Hancock Financial Services.
To brace the economy, the Fed has slashed a key bank lending rate to an all-time low and has embarked on a series of radical programs to inject billions of dollars into the financial system.
And the Obama administration had launched a multi-pronged strategy to turn the economy around. Its $787 billion stimulus package includes money that will flow to states for public works projects, help them defray budget cuts, extend unemployment benefits and boost food stamp benefits.
The administration also is counting on programs to prop up financial companies and reduce home foreclosures to help turn the economy around.
On the economic front, some glimmers of hope have emerged recently.
Orders placed with US factories actually rose in February, ending a six straight months of declines, the government reported Thursday. Earlier in the week, there was better-than-expected reports on construction spending and pending home sales. And last week a report showed that consumer spending, an engine of the economy, rose in February for the second month in a row, after a half-year of declines.
Still, skittish employers announced more job layoffs this week. 3M Co., the maker of Scotch tape, Post-It Notes and other products, said it's cutting another 1,200 jobs, or 1.5 per cent of its work force, because of the global economic slump. Fewer than half the jobs will be in the US, but include hundreds in its home state of Minnesota. The 1,200 figure includes cuts made earlier in the first quarter.
Elsewhere, healthcare products distributor Cardinal Health Inc. said it would eliminate 1,300 positions, or about 3 per cent of its work force, and semiconductor equipment maker KLA-Tencor Corp. said it will cut about 600 jobs, or 10 per cent of its employees.
Agencies
Sunday, March 29, 2009
About 26,000 jobs lost in Malaysia due to global crisis
More than 26,000 people have lost their jobs in Malaysia so far this year as the economic slowdown forced employers to cut back, state news agency Bernama reported Sunday.
Malaysian Employers Federation executive director Shamsuddin Bardan told Bernama he expected further job losses in the coming weeks.
He said a 16.2 billion dollar stimulus package unveiled earlier this month had not provided immediate incentive for companies to retain their workers.
The government has slashed its work permit approvals for foreign workers by almost 70 percent so far this year and cancelled work visas for 55,000 Bangladeshi workers after unions said the situation for Malaysians was bleak enough.
In January, the government also banned the hiring of new foreigners in the manufacturing and services sectors after a report forecast 45,000 Malaysians would lose their jobs in the next few months.
Malaysia is one of Asia's largest importers of labour and has an estimated 2.2 million foreign workers, who are the mainstay of the plantation and manufacturing sectors.
However, the government has become concerned about the ramifications of having such a large migrant workforce and periodically tries to reduce it.
Agencies
Malaysian Employers Federation executive director Shamsuddin Bardan told Bernama he expected further job losses in the coming weeks.
He said a 16.2 billion dollar stimulus package unveiled earlier this month had not provided immediate incentive for companies to retain their workers.
The government has slashed its work permit approvals for foreign workers by almost 70 percent so far this year and cancelled work visas for 55,000 Bangladeshi workers after unions said the situation for Malaysians was bleak enough.
In January, the government also banned the hiring of new foreigners in the manufacturing and services sectors after a report forecast 45,000 Malaysians would lose their jobs in the next few months.
Malaysia is one of Asia's largest importers of labour and has an estimated 2.2 million foreign workers, who are the mainstay of the plantation and manufacturing sectors.
However, the government has become concerned about the ramifications of having such a large migrant workforce and periodically tries to reduce it.
Agencies
Saturday, January 3, 2009
Will US Treasury mull Citi-style rescues to auto giants?
The US Treasury Department has given itself free rein in deciding the rescues of companies in the finance and auto sectors, according to two Treasury statements published this week.
The Treasury on Friday released guidelines for its Targeted Investment Program (TIP), part of emergency legislation enacted in early October to ease a credit crunch from the worst global financial meltdown since the Great Depression.
In the statement, the Treasury outlined the principles of the program under which it rescued ailing banking giant Citigroup on November 23.
Under TIP, the Treasury said it would determine the eligibility of participants and the allocation of resources "on a case-by-case basis."
"Treasury may invest in any financial instrument, including debt, equity, or warrants, that the secretary of the Treasury determines to be a troubled asset, after consultation with the chairman of the board of governors of the Federal Reserve System and notice to Congress," the department said.
Among the criteria in determining a financial firm's eligibility is "whether the institution is sufficiently important to the nation's financial and economic system that a loss of confidence in the firm's financial position could potentially cause major disruptions to credit markets ... or lead to similar losses of confidence or financial market stability that could materially weaken overall economic performance."
Wednesday, the Treasury Department posted on its website a description of its Automotive Industry Financing Program, justifying after the fact its decision to lend a combined 13.4 billion dollars in TARP funds to embattled automakers General Motors and Chrysler to stave off their imminent collapse.
"The objective of this program is to prevent a significant disruption of the American automotive industry that poses a systemic risk to financial market stability and will have a negative effect on the real economy of the United States," it said.
Similar to its approach to the finance industry, the Treasury said it would determine eligibility of participants in the program on a case-by-case basis.
The Treasury announced on December 19 a massive rescue of cash-strapped GM and Chrysler, facing a threat of imminent bankruptcy that could create economic chaos and throw millions out of work across the country.
Source: Agencies
The Treasury on Friday released guidelines for its Targeted Investment Program (TIP), part of emergency legislation enacted in early October to ease a credit crunch from the worst global financial meltdown since the Great Depression.
In the statement, the Treasury outlined the principles of the program under which it rescued ailing banking giant Citigroup on November 23.
Under TIP, the Treasury said it would determine the eligibility of participants and the allocation of resources "on a case-by-case basis."
"Treasury may invest in any financial instrument, including debt, equity, or warrants, that the secretary of the Treasury determines to be a troubled asset, after consultation with the chairman of the board of governors of the Federal Reserve System and notice to Congress," the department said.
Among the criteria in determining a financial firm's eligibility is "whether the institution is sufficiently important to the nation's financial and economic system that a loss of confidence in the firm's financial position could potentially cause major disruptions to credit markets ... or lead to similar losses of confidence or financial market stability that could materially weaken overall economic performance."
Wednesday, the Treasury Department posted on its website a description of its Automotive Industry Financing Program, justifying after the fact its decision to lend a combined 13.4 billion dollars in TARP funds to embattled automakers General Motors and Chrysler to stave off their imminent collapse.
"The objective of this program is to prevent a significant disruption of the American automotive industry that poses a systemic risk to financial market stability and will have a negative effect on the real economy of the United States," it said.
Similar to its approach to the finance industry, the Treasury said it would determine eligibility of participants in the program on a case-by-case basis.
The Treasury announced on December 19 a massive rescue of cash-strapped GM and Chrysler, facing a threat of imminent bankruptcy that could create economic chaos and throw millions out of work across the country.
Source: Agencies
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