US jobs data beats forecasts,
Japan surprises on the negative side
The US economy beat forecasts by adding more jobs in November than expected, showing the economy's resilience as housing and manufacturing slump. According to the Labour Department report released on Friday, 132,000 jobs were added last month, a marked improvement from the 79,000 in October, and higher than market expectations of 110,000. The jobless rate rose to 4.5 percent from a five-year low of 4.4 percent.
The US economy expanded at a 2.2 percent annual rate in the third quarter - the slowest this year - largely owing to a slump in the housing sector and reports suggest that the weakness may be spreading beyond housing. Manufacturing, which accounts for about 12 percent of the economy, contracted for the first time in more than three years last month as inventories grew and orders slowed, according to the Institute for Supply Management report.
The jobs data is consistent with the soft-landing scenario and shows that the economic slowdown remains mild. The central bank has held its benchmark lending rate steady for a third straight month in October and is expected to maintain the stance at its forthcoming meeting next week. The Federal Reserve Chairman Ben S. Bernanke maintains that the economy will continue to expand and even pick up next year.
While the latest data release comes as a silver lining in the cloud of economic slowdown for the world’s largest economy, there were fresh clouds over the economic recovery of Japan. The world’s second largest economy has been emerging from a decade of stagnation, recession and deflation. According to the final numbers released by the Government, GDP in the July to September quarter was up 0.8% on a year ago, compared with the 2% estimated earlier. The main reason for the disappointing figures was a drop in domestic demand, which contracted by 0.2% from the previous three-month period.
The slower economic growth may prompt the Bank of Japan to delay interest rate increase which was expected to come as early as later this month. The Bank of Japan had raised interest rates from almost zero to 0.25% earlier this year in July, as the economy gained in strength and is expected to follow-up with more hikes in future.
The US economy beat forecasts by adding more jobs in November than expected, showing the economy's resilience as housing and manufacturing slump. According to the Labour Department report released on Friday, 132,000 jobs were added last month, a marked improvement from the 79,000 in October, and higher than market expectations of 110,000. The jobless rate rose to 4.5 percent from a five-year low of 4.4 percent.
The US economy expanded at a 2.2 percent annual rate in the third quarter - the slowest this year - largely owing to a slump in the housing sector and reports suggest that the weakness may be spreading beyond housing. Manufacturing, which accounts for about 12 percent of the economy, contracted for the first time in more than three years last month as inventories grew and orders slowed, according to the Institute for Supply Management report.
The jobs data is consistent with the soft-landing scenario and shows that the economic slowdown remains mild. The central bank has held its benchmark lending rate steady for a third straight month in October and is expected to maintain the stance at its forthcoming meeting next week. The Federal Reserve Chairman Ben S. Bernanke maintains that the economy will continue to expand and even pick up next year.
While the latest data release comes as a silver lining in the cloud of economic slowdown for the world’s largest economy, there were fresh clouds over the economic recovery of Japan. The world’s second largest economy has been emerging from a decade of stagnation, recession and deflation. According to the final numbers released by the Government, GDP in the July to September quarter was up 0.8% on a year ago, compared with the 2% estimated earlier. The main reason for the disappointing figures was a drop in domestic demand, which contracted by 0.2% from the previous three-month period.
The slower economic growth may prompt the Bank of Japan to delay interest rate increase which was expected to come as early as later this month. The Bank of Japan had raised interest rates from almost zero to 0.25% earlier this year in July, as the economy gained in strength and is expected to follow-up with more hikes in future.
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