For the first time in four months, China’s Purchasing Manager Index (PMI) recorded an increase rising to 51.7 in August from 51.2 in July. A number above 50 on the index indicates an increase in activity.
The latest result will ease concern that growth is waning in China which is seen as a vital component in leading the global economy to recovery.
Source: BBC News
Meeting minutes from the US Federal Reserve’s August meeting released yesterday indicate that the Bank is prepared to buy more US debt if the economy were to worsen “appreciably”. The minutes suggest that the Central Bank favors the purchase of government bonds but would buy additional mortgage debt if necessary to protect the credit market.
Source: BBC News
Stock markets in Asia and Europe opened lower Monday as investors paused to reflect on the possibility of a “second-dip” recession. The FTSE 100 declined by 1.6% in its opening minutes, while Asian markets also tumbled, with Japan’s Nikkei 225 closing down 3.8%.
The euro continued to struggle, dropping to another four-year low following disappointing news in the US labor market. On Friday, the Non-Farm Payroll Report showed that 431,000 new jobs were created, but analysts had predicted 500,000 – it was also noted that more than 400,000 of these jobs were part-time positions created to conduct the upcoming US census.
Source: BBC News
The number of new jobless claimants in the US rose last week to an unexpected 480,00 for the week ending December 12th from a revised 473,000 the week before.
“The level of new claims remains elevated,” said Steven Wood, president of Insight Economics LLC in Danville, California. “The labor market is improving, but remains soft.”
Bloomberg
Payroll services company ADP estimated that 169,000 jobs were lost in November. The number – the lowest since July – suggests that jobs are still disappearing but at a slower rate than earlier in the year.
“We’re going to see job losses extend well into 2010,” said Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, who forecast a loss of 178,000 jobs. “The labor market is crawling towards stabilization. We need the labor market to improve to generate the wage income necessary to support spending.”
Bloomberg
Failure on the part of German banks to lend money risks pushing the economy back in to recession German’s Economy Minister warned in a recent television interview.
“They should be giving out more credit. If they don’t do this the government can resort to regulatory measures,” said Rainer Bruederle.
It was also announced that Chancellor Merkel will meet banking leaders to discuss the issue in Berlin. The Chancellor noted that she is particularly concerned about the availability of credit to Germany’s small and medium-sized firms that make up most of country’s economy.
BBC News
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