Finance Matters

Posts Tagged ‘US’

Federal Reserve Chairman, Ben Bernanke, has warned that the world’s largest economy is facing a national crisis due to its high unemployment rate, which currently stands at 9.1%.

Earlier this month, the US Labor Department revealed the economy added no new jobs last month, which was a surprise after markets had expected 70,000 new jobs.

This represented the first time since 1945 that there has been a zero payrolls figure after 17,000 jobs were added in the private sector last month but these were cancelled out by 17,000 jobs lost in the public sector.

The economic recovery in the US remains sluggish in the face of higher unemployment and a depressed housing market.

In a speech in Cleveland, Mr Bernanke said: “This unemployment situation we have, the jobs situation, is really a national crisis.

We’ve had close to 10 percent unemployment now for a number of years and, of the people who are unemployed, about 45 percent have been unemployed for six months or more. This is unheard of.”

He is urging the Government to assist the long-term unemployment and suggested that Congress should take more action to address the issue.

Earlier this month, President Barack Obama addressed the nation about a plan for job creation. He unveiled a $450 billion (£282 billion) package aimed at boosting the economy and reducing the federal deficit.

The bill includes tax cuts to workers and small businesses to boost job creation.

Mr Obama has previously said job creation is a top priority; continued high unemployment could threaten his prospects for re-election next year.

In the meantime, Mr Bernanke urged policymakers to introduce “housing policies” to boost the property market, which is currently struggling and many have suggested it is holding back the recovery.

Demand for housing in the US remains weak, despite mortgage rates hovering at record lows and falling house prices – the latter due to millions of home repossessions.

According to Bernanke, long-term unemployment, budgetary discipline and housing issues are the three crucial areas where Congress could contribute to an economic recovery.

He concluded that the Fed can only do so much by keeping interest rates at their historic low and said: “Monetary policy can do a lot, but monetary policy is not a panacea.”

The Commerce Department has revealed sales of new homes in the US fell to a six-month low in August, suggesting the housing market remains depressed.

According to the Commerce Department, new single-family home sales fell 2.3% in August to a seasonally adjusted annual rate of 295,000 units – the lowest level since February.

The figure is now less than half the 700,000 units which experts believe demonstrates a healthy market.

Demand for housing in the US remains weak, despite mortgage rates hovering at record lows and falling house prices – the latter due to millions of home repossessions.

According to one analyst, builders are discouraged from constructing new homes due to the oversupply of existing homes on the market. As a result, sales of new homes are weak, while house prices continue to dip.

Meanwhile, the figures come shortly after the National Association of Realtors (NAR) revealed sales of previously owned homes in the US rose 7.7% to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July.

This is more than 18% higher than the 4.24 million unit level seen a year ago, the NAR said.

According to Lawrence Yun, NAR chief economist: “Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations.”

In related news, the closely-monitored Consumer Confidence Index from the Conference Board is due to be published today.

Confidence is only expected to show a slight improvement, with the index expected to rise to 46 this month – albeit, far away from the 90 points required to show that the world’s largest economy is on solid footing.

Since the index commenced in 1967, the average reading has been 95.6.

The Commerce Department has revealed sales of new homes in the US fell to a six-month low in August, suggesting the housing market remains depressed.

According to the Commerce Department, new single-family home sales fell 2.3% in August to a seasonally adjusted annual rate of 295,000 units – the lowest level since February.

The figure is now less than half the 700,000 units which experts believe demonstrates a healthy market.

Demand for housing in the US remains weak, despite mortgage rates hovering at record lows and falling house prices – the latter due to millions of home repossessions.

According to one analyst, builders are discouraged from constructing new homes due to the oversupply of existing homes on the market. As a result, sales of new homes are weak, while house prices continue to dip.

Meanwhile, the figures come shortly after the National Association of Realtors (NAR) revealed sales of previously owned homes in the US rose 7.7% to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July.

This is more than 18% higher than the 4.24 million unit level seen a year ago, the NAR said.

According to Lawrence Yun, NAR chief economist: “Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations.”

In related news, the closely-monitored Consumer Confidence Index from the Conference Board is due to be published today.

Confidence is only expected to show a slight improvement, with the index expected to rise to 46 this month – albeit, far away from the 90 points required to show that the world’s largest economy is on solid footing.

Since the index commenced in 1967, the average reading has been 95.6.

The Commerce Department has revealed sales of new homes in the US fell to a six-month low in August, suggesting the housing market remains depressed.

According to the Commerce Department, new single-family home sales fell 2.3% in August to a seasonally adjusted annual rate of 295,000 units – the lowest level since February.

The figure is now less than half the 700,000 units which experts believe demonstrates a healthy market.

Demand for housing in the US remains weak, despite mortgage rates hovering at record lows and falling house prices – the latter due to millions of home repossessions.

According to one analyst, builders are discouraged from constructing new homes due to the oversupply of existing homes on the market. As a result, sales of new homes are weak, while house prices continue to dip.

Meanwhile, the figures come shortly after the National Association of Realtors (NAR) revealed sales of previously owned homes in the US rose 7.7% to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July.

This is more than 18% higher than the 4.24 million unit level seen a year ago, the NAR said.

According to Lawrence Yun, NAR chief economist: “Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations.”

In related news, the closely-monitored Consumer Confidence Index from the Conference Board is due to be published today.

Confidence is only expected to show a slight improvement, with the index expected to rise to 46 this month – albeit, far away from the 90 points required to show that the world’s largest economy is on solid footing.

Since the index commenced in 1967, the average reading has been 95.6.

The Commerce Department has revealed US exports hit an all-time high in July, while imports fell.

According to official figures, exports surged 3.8% to $178 billion (£111 billion) after two months of declines.

The rise in exports was attributed to strong overseas sales of manufactured goods, particularly to countries in Central and South America.

Meanwhile, imports fell 0.2% to $222.8 billion – attributed to the decline in the price of oil reducing the cost of the US’s crude imports.

As a result of the figures, the trade gap fell 13.1% to $44.8 billion.

Meanwhile, US’ politically sensitive trade gap with China swelled 1.1% to $27 billion – the biggest imbalance in almost a year.

President Barack Obama has previously said that he wants to double US exports in the next three years to drive employment so the figures will be a welcome boost.

Yesterday, the President addressed the nation about a plan for job creation. He unveiled a $450 billion (£282 billion) package aimed at boosting the economy and reducing the federal deficit.

The bill includes tax cuts to workers and small businesses to boost job creation.

Mr Obama has previously said job creation is a top priority; continued high unemployment could threaten his prospects for re-election next year.

Last week, the Labor Department revealed the economy added no new jobs last month, which was a surprise after markets had expected 70,000 new jobs.

This represented the first time since 1945 that there has been a zero payrolls figure after 17,000 jobs were added in the private sector last month but these were cancelled out by 17,000 jobs lost in the public sector.

The economic recovery in the US remains sluggish in the face of higher unemployment and a depressed housing market.

In related news, yesterday the latest Beige Book report, published by the Federal Reserve revealed widespread signs that US economic growth continues to slow.

The US central bank has previously said the economy is weaker and that policymakers will explore ways to boost growth and lower unemployment at its policy meeting later this month.