Thursday, October 8, 2009

US Job LOSSES GREATER than expected

More US jobs lost than expected
The economy has shed 7.6 million jobs since the recession began

The US economy lost 263,000 jobs in September, which was more than had been expected, according to official non-farm payrolls figures.

The jobless rate rose to a fresh 26-year high of 9.8% from August's figure of 9.7%.

The number in employment has now fallen for 21 consecutive months.

There was more bad news from the Labor Department, which revised its figures for July and August to show 13,000 more jobs lost than previously reported.

The economy as a whole is expected to have grown in the past three months, but recovery in the jobs market tends to lag behind the rest of the economy.

'Pattern of weakness'

Since the start of the recession in December 2007, the number of people out of work has risen by 7.6 million to 15.1 million.

Expectations for recovery may have gotten a little ahead of the reality
Gary Thayer at Wells Fargo Advisors in Missouri

US unemployed despair as benefits run out

"Together with the ISM data, delinquencies data and even the consumer confidence data we had, we're starting to see a pattern of weakness emerge," said Kevin Caron, market strategist at Stifel, Nicolaus & Co in New Jersey.

"We saw a lot of artificial involvement by the government to prop up the markets, and now that that is starting to end the private sector isn't yet showing signs of life."

Government employment, which has been one of the factors boosting the economy in the past year, fell by 53,000 in September.

The other big areas of job losses were construction, manufacturing and retail.

Confidence needed

"It shows expectations for recovery may have gotten a little ahead of the reality," said Gary Thayer at Wells Fargo Advisors in Missouri.

"The trend is still improved from earlier this year, but employers need to feel more confident about the economy before they start hiring again."

The US is not alone in seeing rising unemployment, with the 16 nations that use the euro announcing on Thursday that its seasonally adjusted rate rose to 9.6% in August, putting the number of people without a job at 15.2 million.

Earlier on Friday, Japan unexpectedly announced that its jobless rate had fallen to 5.5% in August from July's record high of 5.7%, but the number of people unemployed still hit a six-year high of 3.61 million.

Banks step in as US Dollar tumbles

Banks step in as dollar tumbles
The dollar fell to a 14-month low against a basket of currencies

Asian central banks have intervened in the currency markets in an attempt to slow the slide of the US dollar.

Asian countries are worried about their export industries, which would be hurt by a weaker dollar.

Central banks in South Korea, Taiwan, the Philippines and Thailand have been buying the US currency, traders said.

As signs of economic recovery begin to emerge, traders have switched from the traditionally "safe" US dollar to buying other currencies.

A fresh wave of dollar-selling may have led to the banks' intervention.

The dollar fell to a 14-month low against a basket of currencies on Thursday.

Analysts believe that other countries have also intervened.

"It was reported earlier this morning that Russia was one of at least six central banks buying dollars," said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon.

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