G.O.O.D

Source: FT.com

Japanese industry suffered a record fall in output in November as unemployment continued to rise and household spending kept sliding, the latest set of gloomy figures from the world’s second-largest economy showed on Friday.

November’s 8.1 per cent month-on-month decline in industrial output, which followed a long series of bad news from Japanese government statisticians, was “particularly striking”, Kaoru Yosano, minister for economic and fiscal policy, told a news conference.

The data will increase pressure on authorities to do more to stimulate the economy, in spite of the government’s record Y88,548bn ($976bn) budget for the fiscal year beginning April 1 and the Bank of Japan’s recent cut in its policy rate to just 0.1 per cent.

The industrial output fall was the most rapid since the current index was introduced in 1953 and the Ministry of Economy, Trade and Industry said its survey showed manufacturers expected another 8 per cent decline this month.

Japan’s economy as a whole contracted in the second and third quarters of 2008 and many economists say a return to growth is unlikely until there is a recovery in demand from export markets, including the US, Europe and China.

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Technorati Tags: Japan , unemployment , household spending

Source: Reuters

A tentative rebound in global stocks spluttered on Wednesday while euro zone government bond yields hit a three-year low as gloomy economic news highlighted the case for more aggressive interest rate cuts in Europe this week.

The euro stayed on the backfoot and oil held near a 3-1/2 year low a day before the European Central Bank, Bank of England and Sweden’s Riksbank are all widely expected to cut borrowing costs.

Supporting those expectations, economic reports on Wednesday showed the euro zone’s services economy fell deeper into recession in November than initially thought and inflationary pressures eased.

“This is a horrible survey across the board, showing that the euro zone service sector is being hit ever harder by the financial crisis, muted consumer spending and markedly weaker activity in key export markets,” said Howard Archer, economist at IHS Global Insight.

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Technorati Tags: European Central Bank, Bank of England, Riksbank