U.S. Economy Update Jan. 8/08
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The U.S. economy generated 18,000 jobs in December – the fewest in four years, far short of the 70,000 expected, and much less than the 115,000-gain in November. Further, the jobless rate jumped to a two-year high of five percent, and that fuelled fears of a consumer recession for the first time in 17 years.
The severity of the U.S. job market woes typically presages the early stages of recession and aggressive Fed easing. The Federal Reserve will more than likely cut interest rates by a further half of a percentage point at the end of this month – and even further by the middle of the year.
Other economic news included recent reports showing a contraction in manufacturing activity (falling at its sharpest rate in five years), and the weakest new home sales in 12 years. Core inflation is low, but U.S. consumers are paying more for gas and food. This news is brought to you by www.forexmentor.com.
–Peter
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