Archive for the ‘growth’ Category

It’s official: US is in recession

December 1, 2008

Just one year ago, people at the White House and thus the rest of the U.S. government, wouldn’t even say the word “recession.”  Well, what a difference a year makes….

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The U.S. economy has been in a recession since December 2007, the National Bureau of Economic Research said Monday.

The NBER — a private, nonprofit research organization — said its group of academic economists who determine business cycles met and decided that the U.S. recession began last December.

By one benchmark, a recession occurs whenever the gross domestic product, the total output of goods and services, declines for two consecutive quarters. The GDP turned negative in the July-September quarter of this year, and many economists believe it is falling in the current quarter at an even sharper rate.

But the NBER’s dating committee uses broader and more precise measures, including employment data. In a news release, the group said its cycle dating committee held a telephone conference call on Friday and made the determination on when the recession began.

The White House commented on the news that a second downturn has officially begun on President George W. Bush‘s watch without ever actually using the word “recession,” a term the president and his aides have repeatedly avoided. Instead, spokesman Tony Fratto remarked upon the fact that NBER “determines the start and end dates of business cycles.”

“What’s important is what is being done about it,” Fratto said. “The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that’s where we’ll continue to focus.”

Euros and US dollar banknotes in a cash register. The euro slipped ...

Read the rest:
http://news.yahoo.com/s/ap/20081201/ap_on_bi_ge/re
cession;_ylt=Av4rK9gOMufRFmgh8CgxMWms0NUE

World Leaders Agree to Seek Major Economic Reform

November 16, 2008

Group of 20 In Wasshington DC Pledges Cooperation to Restore Growth
World leaders holding an emergency meeting to combat the economic crisis agreed yesterday to a far-reaching action plan that, over the next 4 1/2 months, would begin to reshape international financial institutions and reform worldwide regulatory and accounting rules. 

By Glenn Kessler and Anthony Faiola
Washington Post Staff Writers
Sunday, November 16, 2008; Page A01

The leaders’ 11-page statement spoke of broad principles, leaving the details to be worked out by lower-level aides before another summit meeting in April, after Barack Obama assumes the presidency. But the gathering in Washington of the nearly two dozen nations — from every region of the world — reflected the new balance of power emerging in the aftermath of a financial crisis that has devastated even well-run economies, a wrenching process that British Prime Minister Gordon Brown has dubbed “the birth pangs of this new global order.”

World leaders pose for the group photo on Saturday, Nov. 15, ...

World leaders pose for the group photo on Saturday, Nov. 15, 2008, in Washington. President Bush invited leaders of the G-20 community to Washington for a weekend summit to discuss the world economy and the current condition of the financial markets.(AP Photo/RIA-Novosti, Vladimir Rodionov, Presidential Press Service)

Read the rest:
http://www.washingtonpost.com/w
p-dyn/content/article/2008/11/15
/AR2008111500902.html?hpid=topnews

Europe’s Biggest Economy Now In Recession

November 13, 2008

The recession is official after government figures showed that Europe’s largest economy contracted by 0.5% in the third quarter.

This is the second consecutive quarter that the economy has shrunk after a 0.4% contraction in the second quarter for Germany.

BBC

German car production line
Some German carmakers have had to cut back production

The fall in economic output, driven by falls in exports, was greater than many analysts had expected.

Rich countries’ think tank the OECD has also forecast a fall in Euro-area economic activity of 0.5% next year.

“A negative effect on gross domestic product came from foreign trade, with a strong increase in imports and weakening exports,” the Federal Statistics Office said.

Read the rest:
http://news.bbc.co.uk/2/hi/business/7726162.stm

Russian Opinion Polls Say Medvedev, Putin Drop

November 3, 2008

(Angus Reid Global Monitor) – Support for Dmitry Medvedev fell slightly in Russia, according to a poll by the Yury Levada Analytical Center. 76 per cent of respondents approve of their president’s performance, down seven points since September.

In addition, 83 per cent of respondents approve of the way Russian prime minister Vladimir Putin is handling his job, down five points in a month.

Russian voters renewed the State Duma in December 2007. United Russia (YR)—whose candidate list was headed by Putin—secured 64.1 per cent of the vote and 315 of the legislature’s 450 seats. On that same month, Putin endorsed Dmitry Medvedev as a presidential candidate, and Medvedev said it would be of the “utmost importance” to have Putin as prime minister.

Russia's President Dmitry Medvedev speaks in his video blog ... 
Russia’s President Dmitry Medvedev speaks in his video blog about the main topics of his state of the nation address, at Gorki residence outside Moscow, November 2, 2008.(RIA Novosti/Kremlin/Mikhail Klimentyev/Reuters)

In March, Medvedev easily won Russia’s presidential election with 70.28 per cent of the vote. In May, Medvedev was sworn in as president. His nomination of Putin as prime minister was confirmed by the State Duma in a 392-56 vote.

On Oct. 27, Putin announced that Russia has no plans to isolate its economy from the rest of the world as a reaction to the global financial crisis, adding “Of course we must take today’s realities into account, but strategically, isolationism is not our choice. Our choice is building Russia further into the global economy. (…) We advocate consistently removing barriers to foreign trade and forming transparent rules of the game in the world economy and finance.”

Read the rest and see complete poll results:
http://www.angu
s-reid.com/polls/view/medvedev_
putin_drop_slightly_in_russia/

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Medvedev To Give “State of the Nation”

By Guy Faulconbridge, Reuters

The world financial crisis and the consequences of the war in Georgia will be the main topics of Russian President Dmitry Medvedev‘s first state of the nation speech this week, the Kremlin chief said on Sunday.

Speaking in a video blog posted on the http://www.kremlin.ru website, Medvedev said he would deliver the speech — a closely watched overview of Kremlin policy — on Wednesday.

“The crisis started in one of the biggest countries, the United States of America, and has unfortunately spread over the whole planet and every country is having to search for answers to it,” Medvedev said in the blog.

Russian equity and bond markets have tumbled over the past three months as investors dumped Russian assets on concerns the credit crisis could stall a 10-year economic boom and undermine economic stability.

Russian officials say there will be no rouble devaluation and that the state’s bailout packages will calm markets and help indebted Russian companies refinance their debts.

But investors are looking carefully to see what Medvedev will say about measures to tackle the crisis, which has hammered confidence in the domestic banking system and raised fears of nationalizations.

“Medvedev will certainly seek to deliver a message of calm for the domestic markets and to boost public confidence in both the rouble and the country’s banking system,” said Chris Weafer, a strategist at UralSib investment bank in Moscow.

“These are the two biggest priorities for his government right now,” Weafer said.

GEORGIA

Medvedev said a major part of the speech would address the consequences of the war in Georgia, which is seen by Kremlin officials as a turning point for relations with the West.

Read the rest:
http://news.yahoo.com/s/nm/20081102/wl_
nm/us_russia_medvedev_1

China’s Big Airshow This Week is About Aviation’s Future

November 3, 2008

The giants of the aerospace industry will jet in to China‘s only international airshow starting Tuesday hoping the country’s aviation sector can provide shelter from the global financial crisis.

by Guy Newey, AFP

US manufacturer Boeing and Europe’s Airbus will head the line-up of 600 civil and military manufacturers and parts suppliers from 35 countries at the 2008 China Airshow, an annual event in the southern city of Zhuhai.

And as airlines across the world report a drop-off in first and business class travel due to the economic turbulence, the firms will be looking to China to provide crucial growth in the next few years.

“China is going to be the fastest-growing market in the world,” Wang Yukui, the spokesman for Boeing in China, told AFP.

An Air China plane lands at Beijing's international airport. ... 
An Air China plane lands at Beijing’s international airport. The giants of the aerospace industry are set to jet in to China’s only international airshow hoping the country’s aviation sector can provide shelter from the global financial crisis.(AFP/File/Peter Parks)

Research released last week by the US giant found China will need 3,710 new commercial planes worth 390 billion dollars over the next 20 years.

The demand will represent 41 percent of the entire Asia-Pacific market, and only the United States will be a bigger buyer, Boeing said.

In addition, Chinese carriers will add about 370 freight-carrying planes by 2027, quadrupling their total freighter fleet, the Boeing research found.

Airbus chief executive officer Tom Enders also said recently it was expecting a “large order” from Chinese airlines by early 2009, on top of existing memorandums of understanding with Chinese carriers for 280 aircraft.

The company’s giant superjumbo, the A380, will be on display at the China Airshow, as the company tries to take a bigger slice of the thriving market.

In 2007, China’s air traffic soared 16.8 percent to 387.6 million passenger trips, on the back of 16.7 percent growth in 2006, state media reported.

The demand has sparked a similar boom in airport construction, with around 100 new airports planned by 2020, previous reports said.

Nevertheless, China’s aviation sector starting to feel the impact of the global economic turmoil, according to Tom Ballantyne, chief correspondent of industry magazine Orient Aviation.

“Although we are not talking about a cessation of growth, we are talking about a slowdown in growth,” he told AFP.

Read the rest:
http://news.yahoo.com/s/afp/20081103/bs_afp/finance
economychinaaviation_081103072219

China, India wary of taint of global economic crisis

November 1, 2008

Two powerhouse emerging market countries felt the sting of the global financial crisis on Saturday as India unexpectedly cut its main short-term lending rate again and China said it was now feeling a slowdown.

The developments followed signs elsewhere this week that world markets were stabilizing, with interbank rates falling and U.S. stocks posting their best week in 34 years.

“The impact of the crisis on China has just started to appear as China has already seen a sharp slowdown in industrial profit growth and fiscal income,” a senior Bank of China (BOC) executive said in Shanghai on Saturday.

Shoppers walk through Bern's Westside shopping centre, which ... 
Shoppers walk through Bern’s Westside shopping centre, which was designed by architect Daniel Libeskind, on the opening day, in Bern October 8, 2008.(Stefan Wermuth/Reuters)

The global economy will likely enter recession next year with the United States, Europe and Japan posting negative growth, Executive Vice President Zhu Min told a financial conference.

“That will have a huge impact on China,” he said.

Zhu also said currency volatility was expected to add further pressure on China’s banks, which have enjoyed robust profits for years as the country boomed. Earnings growth is now slowing as the economy cools from the impact of the crisis.

“The uncertainties in the world’s currency markets have exposed the Chinese banking sector to higher foreign asset risk,” Zhu said.

A central bank spokesman said Beijing was no longer imposing strict limits on bank lending as it sought to preserve growth in its economy, in which the overseas market is important.

Read the rest:
http://news.yahoo.com/s/nm/20081101/ts_nm/us_financial6_115

Late Friday: McCain claims he has momentum as Obama expands ads

October 31, 2008

Democrat Barack Obama confidently broadened his advertising Friday into two once reliably Republican states and rival John McCain‘s home state of Arizona even as he chastized the Republican candidate for what he called “say-anything, do-anything politics.” The GOP candidate, nevertheless, insisted to audiences in hotly contested Ohio that momentum has swung his way in the final days of the presidential campaign.

Obama’s campaign, capitalizing on his vast financial resources and a favorable political climate, announced that it was going back up with advertising in Georgia and North Dakota, two GOP states that it had teased with ads earlier in the general election campaign but then abandoned.

By MIKE GLOVER and JIM KUHNHENN, Associated Press Writers
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In Iowa, where his campaign took off with a caucus win Jan. 3, Obama told supporters to expect McCain’s campaign to end in a crescendo of attacks on him. “More of the slash and burn, say-anything, do-anything politics that’s calculated to divide and distract; to tear us apart instead of bringing us together,” Obama told 25,000 in Des Moines.

Republican presidential candidate Sen. John McCain, R-Ariz. ... 
Republican presidential candidate Sen. John McCain, R-Ariz. shakes hands with supporters at the end of a campaign stop in Steubenville, Ohio., Friday, Oct. 31, 2008.(AP Photo/Stephan Savoia)

The Illinois senator said he admired a presidential candidate who said in 2000, “I will not take the low road to the highest office in this land.”

“Those words were spoken eight years ago by my opponent, John McCain,” Obama said. “But the high road didn’t lead him to the White House then, so this time, he decided to take a different route.”

McCain was spending a second straight day touring economically ailing Ohio, a swing state with 20 electoral votes that McCain aides acknowledge is central to a victory on Tuesday. McCain was behind Obama in polls in the state.

In Ohio’s hard-pressed southeast, McCain whipped up a crowd of several thousand at the county courthouse in Steubenville, telling them, “You’re going to be the battleground state again. You’re going to be the one who decides. I need Ohio and I need you.”

Read the rest:
http://news.yahoo.com/s/ap/20081031/ap_on_el_pr/campaign_r
dp;_ylt=Ap0o9x6XJQM2XVwmSDe2EA.s0NUE

China’s Worst Nightmare: Unemployment

October 31, 2008

The global economic meltdown has dealt and enexpected blow to China: high unemployment amidst this population of 1.3 billion people.

By Simon Elegant
Time Magazine

When China’s President Hu Jintao made his first official visit to Washington in April of 2006, he encountered a string of diplomatic snafus that culminated in enduring several minutes of screaming from a protester admitted into the media stand. Still, U.S. officials say he and President George W. Bush developed a genuine personal rapport. At one point, Bush asked his counterpart which of the numerous challenges China faced was the most serious — which one kept Hu awake at night worrying.
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“Unemployment,” Hu reportedly answered without hesitating.
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These days, Hu must be suffering from serious insomnia. When that meeting in Washington took place, China’s economy was still expanding at a double-digit rate, creating enough jobs every year that many of the 20 million new job seekers who entered the market found some sort of gainful employment. Now GDP growth has dipped to around 9% and is expected to decline further as the worldwide financial crisis transmogrifies into a global recession. Already, scores of Chinese factories producing consumer goods like toys and plastics goods have shuttered in the southern industrial powerhouse of Guangdong, and thousands of unemployed workers have made their displeasure known with rowdy demonstrations last month.

It’s a situation that is only going to get much worse in the next few months, as the number of unemployed balloons. According to estimates by the Dongguan City Association of Enterprises with Foreign Investment, 9,000 of the 45,000 factories in the cities of Guangzhou, Dongguan, and Shenzhen — the heart of China’s industrial south — are expected to close before the Chinese New Year in late January. That could mean up to 2.7 million workers facing unemployment, the association said. And they called that number “conservative.”

Finding jobs for millions of unemployed is “the biggest challenge [China’s] leadership faces” says David Dollar, head of the World Bank’s China office in Beijing. The current crisis has greatly accelerated a process that was already underway as China’s economy has been shedding low-level factory jobs to transition to manufacturing higher value-added products and jobs in the service industry. “In a way, the crisis could work out well for China. It has the potential to help in rebalancing the economy away from production” to the creation of more jobs in the service sector, says Dollar. If GDP growth slows further to 8%, the government still can hit its job creation targets, but the speed with which the adjustment happens will be critical, he says. “We’re going to learn just how well the capital and labor markets work in China. The concern is if the adjustment is very quick, it could be difficult.”

Read the rest:
http://www.time.com/time/world/article/
0,8599,1855400,00.html?xid=rss-world

For McCain: Open and Shut Case (Especially on Economy, Jobs, Growth)

October 31, 2008

He wants government to tackle large looming liabilities such as Social Security and Medicare. He wants to free up health insurance by beginning to sever its debilitating connection to employment — a ruinous accident of history (arising from World War II wage and price controls) that increases the terror of job loss, inhibits labor mobility and saddles American industry with costs that are driving it (see: Detroit) into insolvency. And he supports lower corporate and marginal tax rates to encourage entrepreneurship and job creation.

By Charles Krauthammer
The Washington Post
Friday, October 31, 2008; Page A19

Last week I made the open-and-shut case for John McCain: In a dangerous world entering an era of uncontrolled nuclear proliferation, the choice between the most prepared foreign policy candidate in memory vs. a novice with zero experience and the wobbliest one-world instincts is not a close call.

But it’s all about economics and kitchen-table issues, we are told. Okay. Start with economics.

U.S. Republican presidential nominee Senator John McCain (R-AZ) ...

Above: U.S. Republican presidential nominee Senator John McCain (R-AZ) speaks at a campaign rally in Defiance, Ohio October 30, 2008. REUTERS/Brian Snyder

Neither candidate has particularly deep economic knowledge or finely honed economic instincts. Neither has any clear idea exactly what to do in the current financial meltdown. Hell, neither does anyone else, including the best economic minds in the world, from Henry Paulson to the head of the European Central Bank. Yet they have muddled through with some success.

Both McCain and Barack Obama have assembled fine economic teams that may differ on the details of their plans but have reasonable approaches to managing the crisis. So forget the hype. Neither candidate has an advantage on this issue.

On other domestic issues, McCain is just the kind of moderate conservative that the Washington/media establishment once loved — the champion of myriad conservative heresies that made him a burr in the side of congressional Republicans and George W. Bush. But now that he is standing in the way of an audacity-of-hope Democratic restoration, erstwhile friends recoil from McCain on the pretense that he has suddenly become right wing.

Self-serving rubbish. McCain is who he always was. Generally speaking, he sees government as a Rooseveltian counterweight (Teddy with a touch of Franklin) to the various malefactors of wealth and power. He wants government to tackle large looming liabilities such as Social Security and Medicare. He wants to free up health insurance by beginning to sever its debilitating connection to employment — a ruinous accident of history (arising from World War II wage and price controls) that increases the terror of job loss, inhibits labor mobility and saddles American industry with costs that are driving it (see: Detroit) into insolvency. And he supports lower corporate and marginal tax rates to encourage entrepreneurship and job creation.

An eclectic, moderate, generally centrist agenda in a guy almost congenitally given to bipartisanship.

Read the rest:
http://www.washingtonpost.com/wp-dyn/content/article/
2008/10/30/AR2008103003636.html?hpid=opinionsbox1

This is Part II.  Part I is at:
http://www.washingtonpost.com/wp-dyn/content/article/
2008/10/23/AR2008102302867.html

China’s economy feels chill from global crisis

October 20, 2008

The laid-off factory workers and slumping car sales indicated China‘s booming economy had no immunity from the global meltdown. New figures confirm it: China’s economy is still growing, but at the slowest pace in five years.

By ELAINE KURTENBACH, AP Business Writer

The National Statistics Bureau said Monday that China’s economy expanded by just 9 percent in the third quarter. That marks the slowest rate since the second quarter of 2003, when the outbreak of Severe Acute Respiratory Syndrome, or SARS, cooled growth to 6.7 percent.

In comparison, China realized 10.6 percent growth in the first quarter and 10.1 percent in the second quarter.

Two workers cycle through piles of steel materials at a port ... 
Two workers cycle through piles of steel materials at a port in Yingkou, northeast China’s Liaoning province, Monday, Oct. 20, 2008. China’s economic growth slowed to a still-robust 9 percent in the third quarter of this year, prompting leaders to pledge new measures to counter the economic slowdown and cushion the impact from the global credit crisis.
(AP Photo)

After years of feeding a voracious global appetite for its exports, China is seeing demand dry up as consumers in the U.S. and Europe cut back on spending in the wake of the mortgage-debt meltdown. The shift is a serious challenge for Beijing leaders as they struggle to keep job-creating growth on an even keel.

Protests by laid-off workers demanding their paychecks have already erupted as thousands of factories fold under the pressure of rising costs and slowing orders. Affluent city dwellers are feeling the pinch of sinking share prices and a weak housing market — sales of passenger cars fell 6.2 percent in August from a year earlier, according to the China Association of Automobile Manufacturers.

“The growth rate of the world economy has slowed down noticeably. There are more uncertain and volatile factors in the international economic climate,” National Statistics Bureau spokesman Li Xiaochao said in a nationally televised news conference.

“All these factors have started to release their negative impact on China’s economy,” Li said.

Exports have just begun to slow — the trade surplus hit a monthly record $29.3 billion in September as costs for imports eased thanks to lower prices for crude oil and other commodities.

A weaker China spells trouble for other Asian countries that have thrived on robust sales of raw materials and other manufacturing inputs to their giant neighbor.

“The problem is that China’s economic growth is slowing down when it is most needed,” said Huainan Zhao, a banking expert at Cass Business School in London.

Read the rest:
http://news.yahoo.com/s/ap/20081020/ap_on_re_a
s/as_china_economy_4