Housing prices rose in Great Britain in January 2010 for the first time in 10 months, but early reports for February show some slippage, down 1.4 percent over January. Prices are nevertheless 9.2 percent higher than in February 2009. The housing price news is accompanied revised figures published 25 February by the government that show the UK grew by 0.3 percent in the last three months of 2009, slightly more than earlier reports showed.
Links to other sites: BBC, Market Watch
Exports, port of Basel
Update 11:40 Bern, Switzerland (GenevaLunch) – Switzerland officially moved out of recession in the third quarter of 2009, Bern announced Tuesday 1 December. Real GDP (gross domestic product) was up 0.3 percent compared to the previous quarter. Private consumption (+0.6 percent) and building investments both grew, and healthcare plus the financial and insurance industries also rose. Investments were up “massively”, with industrial goods investments rising by 5.5 percent.
The government’s own “consumption expenditure” rose by 1.3 percent.
Exports of goods and services both climbed, by 2.2 and 0.3 percent respectively, for the first time “after a considerable one-year slide” the government statement reports.
The US Labor Department released figures for unemployment 6 November that showed that the economy shed 190,000 jobs in October, bringing the unemployment rate to 10.2 percent of the workforce, its highest level since 1983. Hopes had been higher yesterday 5 November that the jobs market may be recovering , when the Labor Deptartment showed that labour productivity rose 9.5 percent annually in October, indicating that companies were squeezing more output out of their workers ahead of hiring more. The economy grew at an annual rate of 3.5 percent in the third quarter 2009, officially ending the recession.
Todays figures are psychologically significant. Most observers had anticipated that the jobless rate would reach10 percent, but there were hopes that an improving economy would then begin to increase demand for workers. The pace of lay-offs has slowed appreciably since the beginning of the year, when almost three-quarters of a million people were laid off. New York Times, Reuters, Yahoo News
Asian stocks rose Monday 26 October on news that Toyota had made an “unexpected profit” and South Korea posted the best growth figures for its economy in seven years, reports Bloomberg. The global economic picture remains mixed, with the UK Monday posting figures for July-September 2009 that show the recession on a par with that of 1979-81, says the FT. In the US, the Federal Reserve closed three more banks, bringing the number of closures to 100 for the year, the highest figure since 1992.
Links to other sites: BBC, Bloomberg, Financial Times
Elderly people in the United States are increasingly coming out of retirement to look for work because of the recession. The need to pay for housing, medical bills and even food is forcing older workers back into the labour market, according to a study by the non-governmental organization Experience Works. Almost half of the 2,000 low-income survey participants over 55 years old need to work to keep their homes, the study says. Experience Works is the “nation’s largest nonprofit provider of community service, training and employment opportunities for older workers,” according to Reuters.
The news agency reports US Department of Labor data as showing that in August 2009 two million people over the age of 55 were looking for work, an increase of 69 percent over August 2008. US News reports a glimmer of hope, however, in noting that the unemployment rate for workers over 55 decreased slightly from June 2009 to July. Unemployment figures do not include people out of the work force, for example retired people, who have decided to look for jobs again. US Bureau of Labor Statistics spotlight on older workers, July 2008
Ben Bernanke, chairman of the US central bank the Federal Reserve, said 15 September that the recession in the US was probably technically over, but that unemployment would continue to undermine any recovery. A recession is officially no or negative economic growth for two consecutive quarters. Latest data about US employment indicates that the unemployment rate is at its highest since 1983, at 9.7 percent. US consumer confidence was up significantly, according to a survey published 15 September by Investor’s Business Daily/Technometrica market Intelligence. BBC, Reuters
Swiss exports decline - Photo Stefan Sueess/SECO
Bern, Switzerland (GenevaLunch) - The Swiss economy is still in a recession. GDP (gross domestic product) declined 0.3% in comparison to Q1, and 2% compared to 2008, new figures from the Secretariat for Economic Affairs (Seco) show. The slide is less than many economists were expecting.
Following two quarters of unusually sharp falls, the downward trend in exports of goods fell by 2%. However, value-added in the construction sector increased 1.1%.
Swiss GDP has been shrinking for the past four quarters which confirms the recession. According to economists, a true economic recession can only be confirmed if GDP growth is negative for a period of two or more consecutive quarters.
Related: Le Temps, Fre
Japan has reported modest signs of growth that have technically pulled it out of recession, with a 0.9 percent increase in GDP in the second quarter of 2009, for an annual rate of 3.7 percent. Stronger exports and substantial government spending to stimulate the economy were credited with the boost, which comes after a 3.1 percent drop in GDP in the first quarter. Japan officially entered recession in 2008.
The US Federal Reserve, the country’s central bank, says that it sees the US economy beginning to stabilize after months of recession. But it kept short term interest rates on hold, near zero percent since December, after its FOMC, rate-setting committee meeting, Wednesday, 12 August. The Fed pointed to improving financial markets as an indicator that the recession is coming to an end. The bond markets dipped a little on the news, disappointed that the Fed was not going to increase its bond market interventions, but then came back. Major stock indices were at highs since the crisis began, and the dollar strengthened against the Yen. Reuters
Unemployment figures in the US are at an all-time high of 9.4 percent, and President Barack Obama says he believes they could go as high as 10 percent. Housing foreclosures set new records, too: more than 360,000 homeowners received a foreclosure filing in July, meaning that legal action was being taken to repossess their homes because they can’t maintain mortgage payments. In the first seven months of the year, 2.3 million homes have been repossessed, auctioned or foreclosed, a record. Reuters, Financial Times (pay), NZZ (Ger)
Might soon be time to trade in your old Ferrari California (image ©2009 Ferrari/Geneva Motor Show)
Ferrari 458, sleek, aerodynamic
Milan, Italy (GenevaLunch) – The Italia 458 Ferrari, due to be unveiled at the Frankfurt auto show in Germany 15 September, is the Italian carmaker’s bid to beat the worldwide economic slump by facing it head on. The Italia is a completely new car, aided by crucial design input from Gland, Switzerland-based world racing champion, Michael Schumacher, a former Ferrari racer.
Ten of the largest US banks, which together account for two-thirds of the capital of US banks, will need a $74.6 billion boost in capital to cope should the recession worsen, a “stress test” of 19 banks has shown. Bank of America will need the most, an estimated $33.9 billion. The banks will look to a mix of solutions to raise the money. BBC, Bloomberg
Zurich, Switzerland (GenevaLunch) - Thomas Jordan, a member of the governing board of the Swiss National Bank (SNB), said Thursday in a speech Thursday that Switzerland cannot avoid a recession in 2009, but he added that clear monetary, fiscal and business decisions can reinforce Switzerland’s structural strengths and help the country weather the economic storm. His speech comes as the SNB and the European Central Bank announce that they will continue for another three months a measure taken in October: euro/Swiss franc currency swaps with a term of seven days at a fixed price to improve liquidity in short-term Swiss franc money markets. They are joined in the agreement by Narodowy Bank Polski.
Bloomberg reports that the Bank of England is today expected to cut benchmark interest rates by half a point to 1.5%, the lowest rate since the bank was founded in 1694, “as officials move closer to the limits of conventional monetary policy to fight the recession.”
Neuchatel, Switzerland (GenevaLunch) – Despite the economic news and fears of recession, Swiss retail sales have remained strong: figures for September 2008 show that even adjusted for inflation and the number of selling days in the month, sales were up 2.4% over the same period a year earlier.
The world economic outlook Thursday morning was not bright, with the Britain reporting that unemployment rose from 5.4% in the second quarter of 20008 to 5.8% in Q3 (CNN, Times UK) and is likely to go higher, and Asian stocks falling lower as markets there begin to accept that a recession is underway (Reuters). In the US, Treasury Secretary Henry Paulson changed course and announced that government bailout money will be used to boost consumer spending (Bloomberg). The pound fell to a new low against the euro of £0.8356 and a six-year low against the dollar, at 1.49. (Financial Times). Meanwhile, Germany, Europe’s largest economy, officially entered a recession, according to Bloomberg.
The Bank of England’s latest quarterly report suggests that Britain’s income will shrink by one to two percentage points in coming quarters and that the country is most likely already in a recession. Financial Times
The UK stock market index, the FTSE, fell 4% by midday following a remark last night by Mervyn King, governor of the Bank of England, that recession is here. The pound began to tumble and by noon Wednesday was at a five-year low. Guardian, UK
The European Commission Wednesday reduced its growth forecast for the European Union to 1.4% (1.3% for the euro area), down about a half point from its forecast in April, saying that growth is “expected to slow down sharply and inflation is set to remain higher than usual for some time.” The area will escape recession, but just, it added. The EC cited high commodity prices, housing market “corrections” and a global slowdown in growth as factors.
