World Economics Thread

Scratch

Captain
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Japan’s Unemployment Rate Unexpectedly Falls to 4.9%

By Aki Ito - March 2 (Bloomberg)

apan’s unemployment rate unexpectedly fell in January.

The jobless rate dropped to 4.9 percent from a revised 5.2 percent in December, the statistics bureau said today in Tokyo. The median forecast of 25 economists surveyed by Bloomberg News was for the rate to be unchanged from a preliminary 5.1 percent.

A decline in the unemployment rate is one of the first signs that a rebound in exports is starting to benefit workers, whose job prospects falter last year during Japan’s worst postwar recession. It may still be too early to expect “clear improvements” in the labor market because companies still have excess workers, said economist Tatsushi Shikano.

“The job market is no longer worsening,” Shikano, senior economist at Mitsubishi UFJ Securities Co. in Tokyo, said before today’s report. “But I’m afraid the recovery from here will be weak.”

The unemployment figures were revised to reflect a change in seasonal adjustments, the government said. Household spending climbed 1.7 percent in January, a separate report showed today.

In other signs the labor market is past its worst, the job- to-applicant ratio rose to 0.46, meaning there are 46 positions for every 100 candidates, the Labor Ministry said today. Historical figures revised to reflect new seasonal adjustments showed it was the first increase since September.

The same report showed there were 85 newly advertised jobs in January for every 100 people who started looking for a job that month, marking a second monthly increase. Analysts regard the gauge as a leading indicator of employment.

Prolonged Stagnation

Even so, Japan is likely to see a prolonged stagnation in employment because of deflation, Tetsufumi Yamakawa, chief Japan economist at Goldman Sachs Group Inc., wrote in a report. Slumping prices are squeezing profit margins, requiring firms to slash costs, he said.

Consumer prices excluding food and energy dropped 1.2 percent in January, matching December’s record decline, the government said last week. Finance Minister Naoto Kan renewed calls on the Bank of Japan to help arrest deflation yesterday, saying he hopes prices will rise this year, while Financial Services Minister Shizuka Kamei said the bank could underwrite government debt to fund fiscal stimulus needed to support the economy.

Nisshinbo Holdings Inc. said last month it will eliminate 150 positions at its Nisshinbo Industries unit as it aims to reduce its domestic facilities. Business deteriorated as a result of falling prices, according to the maker of textiles and chemical products.

Best Denki Co., a consumer electronics retailer, said yesterday it will shut 63 stores by February 2012 and is in talks with its labor union to cut jobs. The company may pare about 1,000 jobs, or 20 percent of its workforce, through an early retirement program and a reduction in new hiring, Kyodo News reported yesterday, citing unidentified sources.

Others are trimming their hiring plans. Mizuho Financial Group Inc., Japan’s third-largest bank by market value, has announced that it will hire 34 percent fewer graduates for the fiscal year starting April 2011.

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Japan Scrambles to Avoid Being the Next Greece

Increasing sales tax is most likely option, as bond-rating firms grow worried about nation's massive borrowing

TOKYO—Will global markets start to treat Japan as the next Greece?

Bond traders up to now have been relatively sanguine about Tokyo's massive pile of government debt. But that attitude could be tested over the next three months, as Japan's new center-left government nears a self-imposed June deadline for crafting a plan to get its fiscal house in order. Out-of-control sovereign debt is what plunged Greece into crisis.

The main tool being considered to address Japan's debt problem is an increase in the sales tax, which at 5% is among the lowest in the industrialized world. In Europe, such taxes run closer to 20%. But members of Prime Minister Yukio Hatoyama's cabinet also worry that a tax increase could hammer consumer spending and push the country back into recession.

[...]

Experts generally agree an increase in the sales tax is inevitable, but differ on how it should be implemented. Some argue any increase should be phased in slowly and not started until it's clear it won't kill Japan's economic recovery.

Japan has gone down this road before. A 1997 sales-tax increase triggered a sharp drop in consumption and was blamed for pushing the economy back into a slump and sparking a broaddecline in prices for goods and services in the economy.

The tax idea faces opponents inside the government too. International Affairs Minister Kazuhiro Haraguchi, said, "I'd like to point out boosting tax burdens when [Japan's] regions and economy are fatigued like this would only result in lower tax revenues."

But others argue that, done right, a tax increase could aid economic recovery. For instance, Toshihiro Nishibori, a University of Tokyo economics professor, said the government should start raising sales taxes now, but spread it over 10 yea

rs by increasing it by one percentage point every year.

This method, Mr. Nishibori explains, will not just soften the blow to consumers but would help reverse deflation by creating inflationary expectations. According to this logic, consumers would be expected to slash spending if the tax is suddenly raised by 10%. But if it goes up gradually, with the knowledge that it will keep climbing, people will continue to spend.

"In this way, a tax hike will work as economic stimulus while at the same time improving fiscal conditions," Mr. Nishibori said.

Japan's financial health has deteriorated over the past two decades and, by some measures, Japan's fiscal health is among the worst among major economies.

The nation's gross government debts soared to 229% of its GDP this year, compared with 92% for the U.S. and 118% for Italy, according to the International Monetary Fund.

Still, some experts say worries about Japan's debts are overblown.

"The chance of Japan defaulting on its debt is very small and a spike in long-term interest rates is a risk for a few years down the road," said Tomoya Masanao, a fund manager watching Japan at bond fund Pimco.

Also working in Japan's favor is the fact that nearly 95% of its outstanding government debt is held by domestic investors, a group who has few other investment options. In the U.S., foreigners hold roughly a quarter of the outstanding Treasury notes, making the market inherently more unstable.

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European Jobless Rate Held at Highest in 11 Years in January

March 01, 2010, 6:21 AM EST

Europe’s jobless rate remained at the highest in more than 11 years in January, suggesting the euro-region economy may struggle to gather strength.

Carrefour SA, Europe’s largest retailer, is among European companies cutting jobs to shore up earnings, in turn hurting consumer demand. The euro-area recovery almost ground to a halt in the fourth quarter and economic confidence declined in February. The European Commission said last week that growth may only gain momentum near the end of 2010.

“We expect unemployment to rise toward around 11 percent by year-end,” said Costa Brunner, an economist at Natixis in Frankfurt. “Consumer spending will stagnate this year and a recovery will remain weak with moderate growth.”

Europe’s economy may expand 0.2 percent in the first, second and third quarters and 0.3 percent in the three months through December, the European Commission said on Feb. 25. In the last quarter of 2009, the economy grew 0.1 percent.

Adding to signs of a faltering recovery, expansion in Europe’s services and manufacturing industries stabilized in February and European investor confidence dropped last month. European retail sales remained unchanged in December after declining in the previous month. ...
 
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Scratch

Captain
With the upcoming G-20 summit the big old debate over the right economic policies comes to the spotlight again.
The clash of the two views to either spend now by building a deficit to achieve short term growth => employment, or have consolidated finances that make for stable prices and a solid long term economy.
I am in the camp of consolidated finances with deficits well under controll. The old dogma of nations buying their way into wealth has not proven succesfull, IMO.

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Merkel Rejects Obama's Call to Spend

German chancellor rebuffs pressure to boost domestic demand, not exports; warns Europe's crisis is far from over

By MARCUS WALKER And MATTHEW KARNITSCHNIG - # JUNE 23, 2010

BERLIN—Chancellor Angela Merkel roundly rebuffed U.S. President Barack Obama's call for Germans to aid the global recovery by spending more and relying less on exports, even as she warned that Europe's own financial crisis is far from over.

In an interview with The Wall Street Journal in her Berlin chancellery, an unapologetic Ms. Merkel said the nations that share the beleaguered euro have merely bought some time to fix the flaws in their monetary union. She called on the Group of 20 industrial and developing nations meeting in Toronto this weekend to send a signal that tougher financial-market regulation is on its way to dispel the impression that momentum is fading amid resistance by big banks.

She took aim at an idea voiced by France, the U.S. and others that Germany should help global producers by spurring its persistently weak consumer demand and ending its dependence on unsustainable spending elsewhere. The latest call came in a letter last Friday from Mr. Obama to the G-20, in which he asked big exporters—Germany, China and Japan—to rebalance global demand by boosting consumer spending. ...
 

Rettam Stacf

Junior Member
Registered Member
I cannot find either a European Economics or Russian Economics thread. So I decided to put it here. But if there is one, the Mod can move it over there.

The World’s Most Controversial Gas Pipeline Is Nearing Its Endgame

Satellite images show a Russian ship is set to challenge U.S. sanctions seeking to halt Nord Stream 2 link.

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Excerpt from the article :
  • The Nord Stream 2 pipeline, built to increase the flow of Russian gas into Europe’s biggest economy, was thwarted five months ago after U.S. President Donald Trump imposed sanctions that forced workers to retreat. Now, after a three-month voyage circumnavigating the globe, the Akademik Cherskiy, the Russian pipe-laying vessel that’s a prime candidate to finish the project, has anchored off the German port where the remaining pipeline sections are waiting to be installed.
  • Nord Stream 2 AG, the project operator owned by Russia’s Gazprom PJSC and financed by some of Europe’s biggest energy companies, confirmed that segments for the pipeline are stored at the port but declined to comment on whether the Akademik Cherskiy’s arrival meant that a restart of construction was imminent. The threat of U.S. sanctions is “unlawful discrimination against European companies,” Nord Stream 2 said Wednesday in an emailed statement in reply to questions.
  • Despite the sanctions, Gazprom Chief Executive Officer Alexey Miller has said Russia has the means to build the remaining section on its own, without specifying how. Exports via the link may start by the end of the year, he’s said.
  • U.S. lawmakers drafted legislation signed by Trump in December that forced a pipe-laying ship operated by Allseas Group SA to retreat from the project. Washington argues Nord Stream 2 would give Russia new leverage over Europe. In June, Trump suggested trans-Atlantic allies should buy American liquid natural gas instead.
 

B.I.B.

Captain
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The news said that almost 600k jobs lost in april and The Federal Treasurer says women make up the majority of job losses, i dont want to sound callous but i look forward to enjoying the women who will pour into sex work because of their financial straits at my local brothels or massage parlours (prostitution is legal in australia) in a way i will do my part by supporting them financially by visiting brothels more often after this lockdown ends lol

How will you get around the 2metre spacing requirement?
 

bajingan

Senior Member
Thats what im trying to figure out, government guidelines said even hairdressers need to maintain 1.5 meter distance how thats going to work? lol
 
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