Australia’s jobs market showed signs of cracking on Monday under the weight of the crumbling global economy and British Prime Minister Gordon Brown was set to pledge more help for the long-term unemployed.
US President-elect Barack Obama vowed to restructure a financial rescue plan to save more families from losing their homes, as politicians around the world grapple with how to shield voters from the worst effects of a long and deep recession. Grim data from the United States on Friday showed more than half a million Americans lost their jobs in December, making 2008 the worst year for employment since World War Two.
On Monday a survey from Australia and New Zealand Banking Corp showed the number of job advertisements in Australia slumped to recessionary levels in December. Australia had been one of the few developed countries to have seen its labor market remain relatively buoyant as the worldwide slowdown took hold in 2008. The survey showed the total number of job advertisements in newspapers and on the Internet slid 9.7% in December from the month before, the eighth straight month of losses. Ads were down 29.9% from December last year and had fallen 22% since September, the sharpest three-month drop on record.
“This result is staggeringly low and suggests that the labor market could be in worse shape than economists expect,” said Joshua Williamson, a senior strategist at TD Securities.
Much of the industrialized world is already officially in recession and all the main multilateral agencies, such as the World Bank and OECD, have forecast that developed world economies will shrink this year. The relentless stream of bad news knocked Asia-Pacific shares outside Japan 2.7% lower on Monday, taking losses over the past four session’s to as much as 9.4%. Financial bookmakers predicted European markets would follow suit.
“The negativity still sits in the market, nothing’s really changed in 2009,” said Dominic Vaughan, senior dealer at CMC Markets in Australia. “In the next three to six months we’ve still got difficult times ahead for commodity markets and global markets as well.” Tokyo markets were closed for a holiday.
In the United States, aides to Obama, who takes office on Jan. 20, were in talks with Congressional leaders on both the financial bailout plan and a proposed $775 billion stimulus package that the president-elect says is needed to pull the economy out of a deep slump. “When you look at how we have handled the home foreclosure situation and whether we’ve done enough in terms of helping families ... we haven’t done enough there,” Obama said in an interview with ABC’s ‘This Week’.
In Britain, where retailer Marks & Spencer and car maker Nissan Motor between them announced last week they were cutting 2,430 jobs, Brown was holding a special jobs summit with industry leaders on Monday. “We must do everything we can to help those losing their jobs to find work again quickly or to get a new skill,” Brown was due to say, according to remarks released by his office. “In other words, we cannot always prevent people losing the last job but we can help people get the next job.”
Meanwhile, Asia’s export-driven economies continued to show the strain of sagging consumer demand from Europe and the United States. China’s exports in December fell 2.8% from a year earlier, while imports fell 21.3%, Dow Jones Newswires said, citing a person familiar with the data. If the report is confirmed by customs agency data due on Tuesday, it would mark the second consecutive monthly decline in both imports and exports.
An official source told Reuters that China’s cabinet would discuss concrete steps this week to support its slumping auto and steel industries. Growth in Chinese auto sales slowed to 6.7% last year, the Xinhua news agency reported, citing the China Association of Automobile Manufacturers. Sales grew more than 20% in each of the previous three years in the world’s second-largest auto market.
In South Korea the Hankyoreh newspaper, citing a Bank of Korea official, reported that the economy contracted by more than 4% in the Q4 of 2008 from the third, a much sharper decline than a previous projection of 1.6%. Shares in China Eastern Airlines fell sharply in Hong Kong after the company said on Sunday it would report a large loss for 2008 because of slumping traffic and losses on fuel price hedging contracts.
Aluminium producer Alcoa will report its results later on Monday, kicking off the Wall Street earnings season. Investors will be wary of any reason for analysts to cut their US earnings expectations, which could kill off the past month’s rally in stocks, commodities and emerging markets. IBM and Intel were also due to report this week, while in Europe attention will be focused on retailers such as Carrefour and Delhaize.
Germany, Britain, France, Spain and Sweden all reported collapsing factory output last week, with some posting the worst figures in many years, raising expectations that the European Central Bank would cut rates by half a percentage point to a record low of 2% at its meeting on Thursday. (Reuters)