The Star Online: Business
The Star Online: Business |
- Crucial US pre-election payroll report looks weak
- BoE's Dale says UK growth to falter after Olympic boost
- China mulls lower tax levels to boost long-term investment
| Crucial US pre-election payroll report looks weak Posted: 28 Oct 2012 06:20 PM PDT NEW YORK: The last employment report before the U.S. presidential election is likely to have something for everyone - for those bullish and bearish on the economy and for Barack Obama and Mitt Romney. Non-farm payrolls in October are forecast to have risen 124,000, barely more than September's 114,000 gain, according to 78 economists polled by Reuters. The unemployment rate probably edged back up to 7.9 percent after falling to 7.8 percent from 8.1 percent last month. The figures are due on Friday. On the face of it, that would reinforce the charge leveled by Romney, a Republican, that the policies of his Democratic opponent are to blame for the slowest post-recession recovery since the war. The proportion of America's working-age population that is employed has fallen to 58.7 percent from 60.6 percent when the Democrat took office in January 2009. But Obama can counter that nearly 800,000 more Americans are in work today than when he became president and that five million jobs have been created since the December 2009 trough, according to the Bureau for Labor Statistics. In many respects, the job statistics are likely to paint the same blurred picture as Friday's report showing the economy expanded at a 2.0 percent rate in the third quarter: things are improving, but at a frustratingly slow pace. "For this reason the labor market is currently neither weak enough to do serious damage to Obama's re-election chances nor strong enough to give him a boost," said Bernd Weidensteiner, an economist with Commerzbank in Frankfurt. Opinion polls show the November 6 election is too close to call. FISCAL CLIFF Douglas Roberts, an economist with Standard Life Investments in Edinburgh, said a weaker-than-expected jobs report would not make him too concerned about the U.S. economy. Housing in particular was rebounding smartly, albeit from a low base. But any softness would underline the urgency of eliminating policy uncertainty that is causing businessmen to sit on their hands, not least the prospect of tax increases and spending cuts that will kick in next year in the absence of a long-term agreement to cut America's budget deficit. "Investment and recruitment are being held back until companies have a much better idea of the economic environment they're going to be looking at after the election and the fiscal cliff' negotiations are through," Roberts said. "So I don't think the payroll numbers will tell you an awful lot." The other data highlight of the week is the monthly survey by the Institute for Supply Management, which is closely watched in Asia as a pointer to export and production trends. Economists polled by Reuters expect the ISM index to be unchanged at 51.5. David Lubin at Citigroup said there was a "decent relationship" between the ISM survey and the export orders component of China's official purchasing managers' index, which is expected to creep higher. Both reports are due on Thursday. Signs of stabilization in recent Chinese data, including credit growth and rising imports, were a cause for qualified optimism about the prospects in some other Asian economies, Lubin said in a report. "But there is no systematic evidence that the revival in Chinese import demand is generating positive spillovers in a large number of countries," he added. BANK OF JAPAN TO STEP UP That is definitely the case in Japan, whose firms have scaled back sales, output and investment in China after the recent flare-up of a territorial dispute over islets in the East China sea led to violent protests across China and a partial boycott of Japanese goods. With the economy also on the ropes because of the strong yen, the Bank of Japan is widely expected to deliver more monetary stimulus when it meets on Tuesday to prevent the world's third-largest economy from relapsing into recession. Recession already has a firm grip on swathes of the euro zone, hit by a debt and banking crisis that is being exacerbated by austerity measures to reduce yawning budget deficits. Data on Wednesday will probably show that the unemployment rate for the 17 countries using the single currency rose to a record high of 11.5 percent in September from 11.4 percent in August. In Spain, which on Friday reported a jobless rate of 25 percent, the economy is likely to have shrunk by 0.4 percent in the third quarter, just as it did in the second quarter. Madrid releases the report on Tuesday. - Reuters |
| BoE's Dale says UK growth to falter after Olympic boost Posted: 28 Oct 2012 06:17 PM PDT LONDON: Economic growth in Britain will be "materially" lower in the fourth quarter, after an unexpectedly strong boost from the Olympic Games, and it will remain weak for the next couple of years, Bank of England chief economist Spencer Dale told the Times newspaper. Dale welcomed last week's news that Britain's economy grew by a "strong" 1 percent in the second quarter, but warned that the next set of data would look much worse by comparison. "In terms of the headline numbers I expect to see a very sharp fall back," he said, explaining that the one-off boost from the Olympic Games was "even greater than we had expected". A reduction in the cost of funding for banks, positive inflation figures and the Bank's new "Funding for Lending" programme of cheap loans for banks are all good news for the economy, but several negative factors will weigh on growth for some time, Dale said. Recent rises in energy prices, for example, are expected to force inflation back up 2.5 percent in the next few months. "We have had a series of utility price increases and that will feed into households' real incomes, he said." Dale, who opposed the British central bank's most recent expansion of its government bond-buying programme last July, pointed to inflation figures as he repeated his call for caution around quantitative easing. "Inflation with a 'two' in front of it is encouraging, but normally we would have expected in an economy this weak for inflation to be quite a bit below target, and we are not seeing that," he said. "This stickiness in inflation is something we need to take into account when we are thinking about exactly how much more stimulus we need to apply." However, there are circumstances in which Dale said he could imagine voting for further asset purchases. Recent strengthening in the pound is "not good for us in terms of keeping this sort of rebalancing of the economy" towards exports, he said. "I think it is something we are keeping a close eye on. If the exchange rate shifted up very dramatically, other things being equal you would have to take that into account in terms of policy." - Reuters |
| China mulls lower tax levels to boost long-term investment Posted: 28 Oct 2012 06:15 PM PDT SHANGHAI: China may apply a sliding scale to taxing stock dividends in a bid to encourage long-term investment, the China Securities Journal reported on Monday, citing unidentified government officials. Under the proposal, investors holding a stock for more than a month would gain preferential tax treatment, while holding a stock for more than a year would win deeper tax cuts, the newspaper said. The government was also studying tax policies in relation to Qualified Foreign Institutional Investors (QFII) and the trading of crude oil futures, it said. China's government has rolled out a series of measures recently in an effort to stabilize the stock market, which has fallen 6 percent so far this year following a 22 percent slump in 2011. - Reuters |
| You are subscribed to email updates from The Star Online: Business To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
0 ulasan:
Catat Ulasan