US unemployment rate drops in December

Stubbornly high unemployment has hindered the US economic recovery

The US unemployment rate dropped to 9.4% in December from 9.8% in November, the biggest one-month drop since April 1998, official figures show.

Some 103,000 jobs were created last month, the Labor Department said, although this was fewer than the 145,000 to 175,000 forecast.

The lower rate came not only because more people found jobs, but also because 260,000 had given up looking.

If people stop searching for work, they are no longer counted as unemployed.

Stubbornly high unemployment has hindered the US economic recovery.

And Federal Reserve chairman Ben Bernanke warned that it may take up to five years for the unemployment rate to drop to a more historically typical 6%.

But he added that while the economy should grow more strongly this year as consumers and businesses boosted their spending.

But he added a warning: "Notwithstanding these hopeful signs... [with] employers reportedly still reluctant to add to payrolls, considerable time likely will be required before the unemployment rate has returned to a more normal level.

"Persistently high unemployment, by damping household income and confidence, could threaten the strength and sustainability of the recovery."

Headline miss

Overall employment for October and November was revised to show 70,000 more job gains than earlier reported, and the unemployment rate is now at its lowest since May 2009.

Private hiring increased in December by 113,000, while government employment fell by 10,000.

Employment rose by 47,000 in the leisure and hospitality sector and by 36,000 in healthcare, but was little changed in other major industries, the Labor Department said in its monthly report.

The falling rate appeared to counter concerns over fewer-than expected jobs being created, with shares on Wall Street relatively unchanged in early trading.

Meanwhile the euro rose into positive territory against the dollar after the report, but then relinquished those gains.

'Slow recovery'

Analysis

Andrew Walker Economics correspondent, BBC World Service

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The new figures show that a recovery in the labour market is continuing. But it is still not strong.

The number with jobs rose by more than 100,000 but the working age population grew by more than that.

It has been a persistent pattern over the last year. There are nearly 2 million more adults in the US than a year ago, but only 1.1 million more jobs.

The fact that unemployment nonetheless declined reflects a fall in the numbers who want to work. Those who don't want to are not counted among the unemployed.

"The headline miss [on jobs created] is pretty bad, but the drop in the unemployment rate is the one reason why the dollar has not collapsed completely," said Brian Dolan, chief strategist from Forex.com.

"Overall, a very disappointing number that reinforces the idea that we're in for a long, slow jobless recovery."

Moody's Analytics economist Ryan Sweet said while the job market was likely to improve, the lower unemployment rate was unlikely to be sustained.

And economist Peter Morici, professor at the Smith School of Business, University of Maryland, agreed that this was a disappointing set of data.

He said that while there had been a string of stimulus measures taken in the US - the country's huge trade deficit was holding back job creation because the country was importing far more than it produced.

"The growing trade deficit is a tax on domestic demand that offsets much of the benefits of stimulus spending and tax cuts," he said.

Meanwhile, US business group, the Conference Board, said that while the job market had more momentum than it did going into 2010, the report "won't help the continuing weakness in consumer confidence".

Selling pressure continues at KSE

KARACHI: Selling pressure continued to erode values of leading scrips at Karachi Stock Exchange (KSE) Tuesday, as 100-Index lost 22.47 points to close at 5258.28, market sources said.

The turnover volume was improved to 142.906 million shares as 114 scrips sustained losses and 130-recorded gains while 12 remained unchanged.

The market capitalization was eroded by Rs 149 million to Rs 1.677 trillion.

OGDC was the volume leader with a turnover of 15.787 million shares followed by HUBCO 11.362 million shares.

Engro Chemical profit likely to increase over 50 pc

KARACHI: Engro Chemical profit is expected to increase by over 50 percent due to hiked prices of urea in the year 2008 and additional income from the subsidiary units.

According to a report, Engro Chemical profit is expected to increase by 53 percent and amount to Rs4.80 billion, while the per share income works out to Rs22.70. Analysts expecting announcement of Rs2/3 per share profit for the shareholders in the final results.

Iran budget for next fiscal year expected next week

TEHRAN: Iran budget for the fiscal year 2009-10 will be presented in the parliament next week.

The Iranian government has based its budget bill for 2009-10 on an oil price of 37.5 dollars per barrel. Iranian news agency on Sunday reported, "In the final version of the budget bill of the next (Iranian) year the oil price was envisaged at 37.5 dollars per barrel." The government is due to submit the budget of the next Iranian year that starts on March 21 to parliament for final approval next week. The government is obliged to save extra income beyond the budget base price in the Oil Stabilisation Fund, which is used to support macro energy projects and prop up private sector projects.
President Mahmoud Ahmadinejad's extravagant withdrawals from the fund for construction projects have, however been criticised by economists who are concerned about the falling oil price and predict a budget deficit.

Japanese govt estimates zero economic growth for FY 09

TOKYO: The Japanese government projected on Monday that Japan will log almost zero percent economic growth in fiscal year 2009, which starts in April 2009.

The cabinet office said after a meeting that against the backdrop of the global economic meltdown, Japan's real gross domestic product (GDP) would remain sluggish during the next fiscal year on slowing exports as well as shrinking domestic demand.

On a nominal basis, the GDP growth, excluding prices changes, is projected at a pace of around 0.1 percent, said the office.

With the implementation of the government's economic stimulus packages, the economy may show signs of improvement in the second half of the year through March 2010, it said.

Govt. to setup 7 marble cities across Pakistan: Wattoo

ISLAMABAD: Minister for Industries and Production Mian Manzoor Wattoo told the National Assembly on Monday that Pakistan Stone Development Company (PDC) will establish seven marble cities in various parts of the country.

Responding to a question from Marvi Memon during Question Hour, the minister said that initially five marble cities would be set in Risalpur, Federally Administered Tribal Areas (FATA), Karachi, Gaddani and Islamabad have been approved.

He said that marble cities would also be established in Chitral and Loralai.

He said that according to the plan it would take 18 months to complete the projects from the date of commencement, however it is dependent on provision of funds.

Progressive efforts being made for textile Industry: Rana Farooq

ISLAMABAD: Federal Minister for Textile Industry Rana Farooq Saeed Khan has said that textile is the most important sector of the economy and government was committed to overcome all the crises on an emergency basis.

Federal Minister expressed these views here Monday while talking to a delegation of industrialists who called on him.

He said that government is aware of all the problems of textile sector and is very much concerned with the problems of industrialists and exporters.

We are in contact with all stakeholders, industry will see changes in coming days due to some positive steps being taken by the government, he added.

Textile Minister said that immediate remedial measures are being taken to resolve energy shortage adding that concerned authorities are also assured that situation will be normalized within few days.

Rana Farooq said that global economic crises was also an hurdle of these crises due to which local and foreign investors are hesitating for investment in the country.

Minster said that government is making concrete efforts to promote textile industry for growth and development of national economy.

SBP prohibits harassing credit card holders’ family

KARACHI: State Bank of Pakistan (SBP) has issued comprehensive guidelines for commercial banks and development financial institutions (DFIs) dealing in credit card business.

SBP credit card business operational guidelines released here directed commercial banks and DFIs to determine interest rate and service charges on annual basis besides, it would be mandatory for them to get the credit card terms published both in Urdu and English in plain language making it easier for the clients to well understand the terms. Without the prior approval of card holders, no such expenditures be charged, which have not been clearly mentioned in the users guide or application form or schedule of charges, the banks and DFIs would have to ensure that their recovery staff would not harass physically of verbally the credit card holders, their family members and friends and relations and before providing details of new products and services to the clients, their prior approval in this regard would be taken, said the SBP guidelines.

SBP mops up Rs20 bln through open market operation

KARACHI: State Bank of Pakistan (SBP) sucked Rs 20 billion from the banking system by undertaking open market operation.

The central bank issued Treasury Bills for three days at an interest rate of 8.29 per cent to absorb surplus liquidity.

PM sees economic growth under pressure in 2009-10

MUMBAI: Prime Minister Manmohan Singh sees economic growth under pressure in the next fiscal year beginning April, after growth slowed in the current year amid the global credit crisis.

"Our problems will not be over in the current year. The difficult period will continue into 2009/10," Singh said at an awards function in Mumbai.

India's economy is expected to grow by 7-7.5 percent in the current fiscal year after growing about 9 percent for the last three years, a top finance ministry official said on Friday.

Govt evolving ten-year investment policy: Waqar Ahmed

LAHORE: Federal Minister for Investment, Waqar Ahmed Khan Saturday said that government is evolving a ten-year investment policy and all stakeholder will be consulted in this regard.

Addressing the members of Managing Committee of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) here, he said Pakistan is a suitable place for investment and that is the reason that China, European countries especially countries of eastern Europe, Gulf states are making investment here.

He said that recession has affected all countries but its impacts on Pakistan's economy are not severe.

He said that the government has fixed a target of investment of 10 billion dollar in Pakistan to be achieved by the end of current fiscal year. The investment would be made in energy, oil and gas, water and agriculture sectors, he added.

To a question, the minister said that security is a temporary issue and the government is taking measures to provide conducive atmosphere for investment in the country.

The minister said the government is forming a committee for load management of electricity and natural gas which will comprise leading businessmen and industrialists of the trade body and its recommendation regarding load management will be honoured. The committee will come into existence by next week, he added.

Regarding electricity generation, he said that government will be able to add 2,500 megawatt electricity in national grid by December 2009 and 15,000 megawatt by 2020.

Responding to a question, the minister said that grant released by World Bank for Benazir's Income Support Programme (BISP) would not be spent on power sector but its utilization would be ensured as per WB's direction.

To another question, he said that mark-up rate of banks will not be raised.

Vice President, FPCCI, Azhar Saeed Butt and other leading businessmen were also present on the occasion.

SBP prohibits harassing credit card holders’ family

KARACHI: State Bank of Pakistan (SBP) has issued comprehensive guidelines for commercial banks and development financial institutions (DFIs) dealing in credit card business.

SBP credit card business operational guidelines released here directed commercial banks and DFIs to determine interest rate and service charges on annual basis besides, it would be mandatory for them to get the credit card terms published both in Urdu and English in plain language making it easier for the clients to well understand the terms. Without the prior approval of card holders, no such expenditures be charged, which have not been clearly mentioned in the users guide or application form or schedule of charges, the banks and DFIs would have to ensure that their recovery staff would not harass physically of verbally the credit card holders, their family members and friends and relations and before providing details of new products and services to the clients, their prior approval in this regard would be taken, said the SBP guidelines.

US welcomes Israel's unilateral ceasefire in Gaza: Rice

WASHINGTON: The United States on Saturday welcomed Israel's unilateral ceasefire in its 22-day offensive on the Gaza Strip that sought to deter the Islamist movement Hamas, the US State Department said.

"The United States welcomes the cessation of hostilities in Gaza announced by Israel and expects that all parties will cease attacks and hostile actions immediately," Secretary of State Condoleezza Rice said in a statement.

She reiterated the US position that "the goal remains a durable and fully respected ceasefire that will lead to stabilization and normalization in Gaza."

"The United States commends Egypt for its efforts and remains deeply concerned by the suffering of innocent Palestinians," Rice added. Egypt, a longtime broker of peace between Israelis and Palestinians, was to host an international summit Sunday to seek a permanent truce in Gaza.

Rice added that the US welcomes "calls for immediate coordinated international action to increase assistance flows and will contribute to such efforts."

Amin Fahim plans to visit KCCI Monday

KARACHI: Federal Minister for Commerce, Makhdoom Amin Fahim, will visit Karachi Chamber of Commerce and Industry on Monday.

The meeting will start at 1100 hours, said a KCCI press release.

Meanwhile, Fouzia Wahab, MNA and Chairperson, Standing Committee on Finance and Revenue, National Assembly, will visit KCCI on Saturday at 1645 hours.

Global stocks in grip of losses on worsening economic indicators

SINGAPORE: The world stock markets this week for the investors brought losses, as the worsening data on global economy kept pouring in.

Despite Barack Obama’s $825 billion bailout package announcement, US stock markets remained downbeat and both the index Dow Jones and NASDAQ declined by 3.6 percent and 2.7 percent respectively. Besides, Asian markets’ Hong Kong’s Heng Sang plummeted by 7.3 percent and closed at 13255 points, while Japan’s Nekkei-225 gaining 17 points wrapped up at 9323 points. Following Indian Satyam scandal, Mumbai KBSE Sensix-30 kept plunging and index this week falling by 5.7 percent closed at 8230 points. On the other hand European stock markets were also seen in the negative terrain and despite Germany’s announcement of $66 billion bailout package DAX-30 index tumbled down by 8.3 percent and closed at 4366, while Britain’s FTSE-100 index eroded by 6.7 percent and France’s KCAC-40 index lost 8.2 percent.

Govt. fails to get a slash in branded companies oil, ghee prices

KARACHI: All the branded companies are still selling their edible oil and ghee at Rs120-135 per kilo, despite government announcement of Rs3-5 per kilo reduction.

Karachi Retail Grocers Group said that the branded companies were selling edible oil and ghee at Rs120-135 in the local market, while the government had earlier in November 2008 fixed the oil and ghee prices at Rs98 per kilo, but the branded companies in brazen violation of the government writ continued selling their products at Rs135-140 per kilo. The government recently further announced a cut in oil and ghee prices by Rs3-5, but this time again it appeared that the branded companies are in no mood of abiding the government directives and the citizens are forced to buy oil and ghee at higher prices. Sugar price in the local market has also shot up by Rs6 per kilo during the last one month and it is being sold at Rs40 per kilo.

SBP mops up Rs20 bln through open market operation

KARACHI: State Bank of Pakistan (SBP) sucked Rs 20 billion from the banking system by undertaking open market operation.

The central bank issued Treasury Bills for three days at an interest rate of 8.29 per cent to absorb surplus liquidity.

Tareen for enhancing tax ratio for economic growth

KARACHI: Advisor to PM on Finance Shaukat Tareen on Saturday underlined the need for enhancing tax to GDP ratio to 18 to 20 percent to achieve 7 to 8 percent growth in the economy.

He was speaking at the excellence awards ceremony for top taxpayers of Large Taxpayers Unit (LTU) here Saturday. Chairman FBR, Ahmad Waqar, Governor State Bank of Pakistan Salim Raza, Fauzia Wahab MNA, Senator Ahmed Ali were also present on the occasion.

He said that other rising economies like China, Turkey and India have enhanced their tax to GDP ratio beyond 20 percent to maintain higher GDP growth.

He informed that China has maintained a tax to GDP ratio of 21 percent in the past several years while Turkey is maintaining it at 28 percent to accomplish higher economic growth.

Tareen pointed out that despite higher revenue collection rising from Rs 300 billion to Rs 1.3 trillion, the tax to GDP ratio has declined from 13.9 percent in 1996 to 9.6 percent in 2007-08.

He said the government which collect higher revenue can look after the welfare of their people much better. “On the contrary, revenue collection in Pakistan has fallen short, forcing the economic managers to resort to bank borrowing and thus fueling inflation and crowding out private sector”, he added.

Later, talking to media, he said that profiteers were responsible for price hike in the country. He said the government was trying to decrease prices in the country and it has lowered petrol prices and CPI has also come down.

FBR chairman said that merger of direct taxes with sales tax and federal excise into inland revenue services was a major initiative of the present government to enhance tax collection.

DG LTU Faiyaz Khan in his welcome address highlighted the performance of LTU in tax collection.

Later, the Advisor gave away excellence award among major tax payers including PPL, PSO, Lakson Tobacco, NBP, Unilever Pak, NIC, CAA, Pak Suzuki, Pakistan Steel, Pakistan Beverage Ltd, etc.

CNG prices raised by Rs3.50 per kg

ISLAMABAD: Petroleum and CNG Dealers Association has informed the Ministry of Petroleum of its decision to increase the rate of Compressed Natural Gas (CNG) by Rs3.50 per kilogram.

Vice Chairman Petroleum and CNG Dealers Association Bashir Akbar Ali told this to Geo News.

He said after the above rise, the prices of CNG in Karachi, Sindh and Punjab will be Rs48 per kg while its rate will be Rs50 per kg in Islamabad, Peshawar and NWFP.

Bashir Akbar Ali said CNG sector is deregulated and it can revise the prices in view of the cost.

Amin Fahim plans to visit KCCI Monday

KARACHI: Federal Minister for Commerce, Makhdoom Amin Fahim, will visit Karachi Chamber of Commerce and Industry on Monday.

The meeting will start at 1100 hours, said a KCCI press release.

Meanwhile, Fouzia Wahab, MNA and Chairperson, Standing Committee on Finance and Revenue, National Assembly, will visit KCCI on Saturday at 1645 hours.