Four years of US gains wiped out

Here is a good story from the Washington Post which quotes new figures from the Federal Reserve which says that

Falling stock and home prices have wiped out four years of gains in Americans' net worth since the start of 2008.Nearly half of those losses occurred over the last three months of the year, the biggest quarterly decline since recordkeeping began in 1952.

One storm too many

Whilist politicians on both sides of the Atlantic battle against the economic storm,another storm is creating problems on Capitol Hill.

It is the Blackberry storm which according to Politico

was supposed to be RIM’s sleek answer to Apple’s iPhone. But for members and staffers accustomed to thumbing their way through the day, this isn’t just the imperfect Storm. It’s the devil in 5.5 ounces.

Ht-Charles Arthur

US job figures - a fundemental shift in the economy

Yesterday's US unemployment figures were dreadful.

An article in thsi morning's New York Times suggests that they may be merely the start of a reconstrction in the US economy.

For those who missed the Feb figures,651,000 people joined the list that represents around 8.1% of the working population and it is the highest level in 25 years.

The paper reports that John E. Silvia, chief economist at Wachovia in Charlotte, N.C says that the jobs wont return

A lot of production either isn’t going to happen at all, or it’s going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses.”

Ok this has happened before in recessions but never across such a mix of industries.It has effected services as much as it has effected manufacturing.

The question for the Obama administration is what replaces these industries?

Brother can you spare a dime?

The latest employment figures from the United States make grim reading.

Over half a million people lost their jobs in Nov and unemployment is at its highest rate since the days of Richard Nixon.6.7% of people are now on the dole and Nov was the 11th successive month that the figures have risen.

In the last six months over one and a half million peple have lost their jobs in the States.

The New York Times reports

“We have gone from recession into something that looks more like collapse,” said Ian Shepherdson, chief domestic economist at High Frequency Economics, referring to the accelerating job losses in recent months.

More worryng is that 70% of the losses came in the retail hotel and restaurant sectors.

The news that the world's largest economy is plummeting into recession pushed oil prices to a new low,prices are 70% down from the July peak

US employment figures

Confirmation that the American economy is slipping into a deep slump today with the news that 240,000 jobs vanished in October meaning unemployment is at a 14 year high across the Atlantic.

Unemployment now stands at 6.5% and has been rising now for 10 consecutive months.

It was hardly the best news for the President elect who was due to meet with his advisers and discuss the economic picture.The figures merely confirm the major problems that Obama will inherit come 20th January.

According to the Washington Post

Manufacturing lost 90,000 jobs, part of a steady decline in U.S. factory employment, while construction shed 49,000 jobs. The retail sector lost 38,000 jobs, with high gas prices, stagnant wages and general concern about the economy leading consumers to scale back spending. Professional and business service companies dropped 45,000 positions.

Thia from Richard Dekaser, chief economist at National City Corp

We have entered the phase of serious recession conditions. Unfortunately we will encounter more of this going forward. This is going to increase the urgency for another stimulus package to staunch the slide. Stimulus spending like (we had) early this year was not very effective. Infrastructure spending does not work quickly. Waiving the tax on jobless benefits is a fabulous idea because the money saved will be 100% spent.