ARAB TIMES, FRIDAY, SEPTEMBER 21, 2012
Goldman CEO against austerity measures BoA to cut 16,000 jobs
The chief executive of Goldman Sachs another stimulus because of the conse- ing “fiscal cliff” in January, when Bush-era Bank of America plans to cut 16,000 jobs by top executives, are part of a larger strategy by
says he is against austerity measures in quences to the government’s balance tax cuts expire and across-the-board spend- year-end in a major restructuring that would chief executive Brian Moynihan — who took
the short term as the US “fiscal cliff” looms. sheet and said the US has to convince ing cuts are set to take effect. Economists end its title as the biggest US banking indus- over in 2010 — to make the bank more effi-
Lloyd Blankfein, also chairman of the the market it will deal with its problems in warn that unless Congress acts, the one-two try’s largest employer, The Wall Street cient and reduce its exposure to risk, the
investment bank, said during a talk the long term. austerity punch would send the fragile econ- Journal reported Thursday. Journal said.
Wednesday at the Canadian Club of “I’m all for implementing budget omy back into recession. The cuts will take the banking giant’s total Most of the cuts are expected to come from
Toronto that he’s all for budget cutbacks changes that accelerate over the long Blankfein, who took questions from employment to 260,000, the Journal said, the the consumer banking division, as the bank
in the long term but not right now. term, but in the short term I wouldn’t take Royal Bank Chief Executive Gord Nixon, lowest level since 2008, when the bank plans to close 200 branches, in addition to 178
Blankfein said, “You can’t austere your- too much money away from people or cut said Republicans and Democrats have acquired failing mortgage lender Countrywide shut down in 2011, the newspaper said, citing
self into a higher GDP” and added, “It’s back on a lot of expenditure programs,” the power to solve the problem, but a Financial and the Merrill Lynch investment an individual familiar with the document.
not going to be very good if the medicine Blankfein said. “defect” in the political system has pre- bank. A spokeswoman for the bank refused to
kills the patient.” He said there can’t be The US faces the prospect of a debilitat- vented moderates from agreeing. (AP) The cuts, outlined in a document given to comment on the report. (AFP)
Govt policies critical
US factory, jobless claims data
US economy has hit
trough, says survey signal weak economic recovery
WASHINGTON, Sept 20, (AP): The
US economy is showing signs of
Income inequality varied widely
by region. The gap between rich and
Measure of future activity falls in Aug
finally bottoming out: Americans are poor was most evident in the District
on the move again after record num- of Columbia, New York, NEW YORK, Sept 20,
bers had stayed put, more young Connecticut, Louisiana and New
adults are leaving their parents’ Mexico, where immigrant or minori- (Agencies): US manufacturing Rate on 30-year mortgage falls to record 3.49 pct
homes to take a chance with college ty groups were more numerous. closed out its weakest quarter
or the job market, once-sharp As a whole, Americans were slow- in three years this month and
declines in births are leveling off and
poverty is slowing.
New 2011 census data released
ly finding ways to get back on the
move. About 12 percent of the
nation’s population, or 36.5 million,
the number of Americans fil-
ing new claims for jobless ben-
US housing market recovery picks up
Thursday offer glimmers of hope in moved to a new home, up from a efits held near two-month WASHINGTON, Sept 20, (Agencies): New building permits, an indicator of purchases and refinancing,” which in turn
an economic recovery that technical- record low of 11.6 percent in 2011. The recovery in the US housing market future homebuilding, fell 1.0 but were would help the economy grow, Bernanke
ly began in mid-2009. But not all is Among young adults 25 to 29, the highs last week, suggesting the continues to strengthen, data released 24.5 percent higher than a year ago, the said.
well. The jobless rate remains high at most mobile age group, moves also economic recovery is failing to Wednesday showed, a key improvement department said. IHS Global Insight economists Patrick
8.1 percent. Home ownership increased to 24.6 percent from a low gain traction. in the struggling economy just seven Last month it reported new-home sales Newport and Michelle Valverde predict-
dropped for a fifth straight year to of 24.1 percent in the previous year. Financial information firm Markit weeks before the presidential election. surged in July to their highest level since ed that existing-home sales would climb
64.6 percent, the lowest in more than Longer-distance moves, typically for said its US “flash”, or preliminary, The National Association of Realtors said April 2010. The August numbers are due 7.0-10.0 percent this year, but stressed
a decade. More Americans than ever those seeking new careers in other that sales of so-called “existing”, or previ- next Wednesday. that would be “from very low levels.”
are turning to food stamps, while res- regions of the country, rose modestly manufacturing Purchasing Managers ously occupied, homes, jumped 7.8 percent Homebuilders waxed optimistic. On “Normal conditions are still at least a
idents in housing that is considered from 3.4 percent to 3.8 percent. Index stood at 51.5 in September, from July, the highest pace since May 2010, Tuesday, the National Association of couple of years away,” the analysts said.
“crowded” held steady at 1 percent, Less willing to rely on parents, unchanged from August. A reading and were up 9.3 percent from a year ago. Home Builders said its NAHB/Wells
tied for the highest since 2003. roughly 5.6 million Americans ages above 50 indicates expansion. Also:
Prices increased the most in more than Fargo sentiment index rose for a fifth
And growth in the foreign-born 25-34, or 13.6 percent, lived with The index averaged 51.5 in the third six years. The median price, the middle straight month to its highest reading since WASHINGTON: The average US rate on
population is slowing. Mom and Dad, a decrease from 14.2 quarter, below the 54.2 registered point between the top and bottom prices, June 2006. the 30-year fixed mortgage touched its
Taken as a whole, however, ana- percent in the previous year. between April and June, for its worst rose to $187,400, up 9.5 percent year- Even so, home prices remain about 30 record low this week and the rate on 15-
lysts say the latest data provide wide- The increases in mobility coincide showing since the third quarter of 2009. over-year. percent below their 2006 peak and rough- year mortgage hit a new record.
ranging evidence of a stabilizing US with modest improvements in the job At 51.2, the output component was the “The US housing recovery is for real,” ly 15 percent below their August 2004 The declines followed the Federal
economy. Coming five years after the market as well as increased school lowest since September 2009. said Sal Guatieri, senior economist at level. Barclays analyst Michael Gapen Reserve announcement last week that it
housing bust, such a leveling off enrollment, especially in college and After growing at a 1.7 percent annual BMO Capital Markets. cautioned that the housing recovery still would buy bonds to try to push mortgage
would mark an end to the longest and at advanced-degree levels. pace between April and June, the econo- “Great affordability, pent-up demand faced significant challenges. rates lower and stimulate the housing
most pernicious economic decline Marriages dipped to a low of just my likely slipped “closer towards stagna- and strong investor interest in rental units “Our view is that housing is in a recov- market.
since World War II. 50.8 percent among adults 18 and tion” between July and September, he are driving the market, and QE3 can only ery phase, but one that will be restrained Mortgage buyer Freddie Mac said
“We may be seeing the beginning of over, compared with 57 percent in added. help by reducing mortgage rates further.” by the availability of credit, the pace of Thursday that the average rate on the 30-
the American family’s recovery from 2000. Among young adults 25-34, A separate report from the US Labor Signs of life are welcome in the hous- improvement in labor market conditions, year loan declined to 3.49 percent from
the Great Recession,” said Andrew marriage was at 43.1 percent, also a Department showed initial claims for ing sector, where millions of Americans and the overhang from distressed and 3.55 percent last week. That matched the
Cherlin, a professor of sociology and new low, part of a longer-term cultur- state unemployment aid edged down just have tied up their savings only to see foreclosed properties,” he said. lowest rate since long-term mortgages
public policy at Johns Hopkins al trend in which people are choosing 3,000 to a seasonally adjusted 382,000 them evaporate when a price bubble burst The US central bank last week rolled began in the 1950s.
University. He pointed in particular to to marry at later ages and often live last week in 2006, leading the economy into the out its biggest stimulus in two years, The average on the 15-year fixed mort-
the upswing in mobility and to young with a partner first. Economists had attributed a spike in Great Recession. QE3, in part to boost home building and gage, a popular refinancing option,
men moving out of their parents’ Births, on the other hand, appeared claims in the prior week to Tropical They come as President Barack Obama buying, and fight high unemployment in plunged to 2.77 percent, a new record.
homes, both signs that more young to be coming back after years of Storm Isaac, but the minimal improve- grapples for re-election on November 6 the aftermath of the Great Recession. That’s down from 2.85 percent last week
adults were testing out job prospects. steep declines. In 2011, the number ment in the latest reading pointed to fun- in a tight race against Republican rival Federal Reserve Chairman Ben and the previous record low of 2.80 per-
“It could be the modest number of of births dipped by 55,000, or 1 per- damental weakness. Mitt Romney, with economic issues at the Bernanke said the QE3 program — pur- cent.
new jobs or simply the belief that the cent, to 4.1 million, the smallest drop Claims top of voters’ concerns. chases of mortgage-backed securities at a Cheap mortgages have helped drive a
worst is over,” Cherlin said. since the pre-recession peak in 2008, The four-week moving average for A separate report from the Commerce pace of $40 billion a month — should modest housing recovery this year.
Richard Freeman, an economist at according to Kenneth Johnson, a new claims, a better measure of labor Department showed housing starts rose help lower interest rates, particularly on Sales of both previously occupied and
Harvard University, said the data point sociology professor and senior market trends, rose 2,000 to 377,750 — 2.3 percent from July, and were up 29.1 mortgage rates which have been hovering newly built homes are up from last year.
to a “fragile recovery,” with the econ- demographer at the University of the highest level since June. It was the percent from the August 2011 rate. at historic lows. Home prices are rising more consistently.
omy still at risk of falling back into New Hampshire. fifth consecutive weekly increase in the Starts on single-family homes jumped QE3 “should provide further support to Builders are more confident in the market
recession, depending in part on who is “There are signs that young adults measure. 5.5 percent. the housing sector by encouraging home and are started more homes.
president and whether Congress have turned a corner,” said Mark Major US stock indexes opened lower,
averts a “fiscal cliff” of deep govern- Mather, associate vice president at with investors also wary of data showing
ment spending cuts and higher taxes the Population Reference Bureau. month until it sees a sustained upturn on future economic activity, dipped 0.1 per- zero indicates contraction.
increasing economic weakness in China the jobs front. cent in August after rising 0.5 percent in Nearly 23 percent of firms in the
taking effect in January. “Given the “More young adults are staying in and Europe. The dollar extended losses
situation in the world economy, we are school, which will increase their Boston Federal Reserve Bank President July and dropping 0.5 percent in June. region reported declines in activity in
and prices for US government securities Eric Rosengren, one of the more vocal The weakness in August came from September. That’s down from 30 percent
doing better than many other coun- potential earnings when the job mar- added to gains.
tries,” he said. “Government policies ket bounces back.” “doves” at the central bank, said the new declines in manufacturing orders, con- in August. The region includes firms in
The report on jobless claims covered stimulus program was need to “avoid a sumer confidence and average weekly Pennsylvania, Delaware and New Jersey.
remain critical.” Climb the period for the government’s September prolonged economic stagnation.” manufacturing hours. Conference Board Manufacturing, which helped lift the
Growth While poverty slowed, food stamp nonfarm payrolls survey. Claims have The unemployment rate has been stuck economist Ken Goldstein says the index country out of the Great Recession, has
The census figures also show slow- use continued to climb. Roughly 14.9 risen 8,000 between the August and above 8 percent for more than three
September survey periods, suggesting depicts an economy still facing signifi- slowed since spring. A weak job market
ing growth in the foreign-born popu- million, or 13 percent of US house- years, the first time this has happened cant domestic and international weak- and meager pay raises have hurt US con-
lation, which increased to 40.4 mil- holds, received food stamps, the modest job growth this month. since the Great Depression.
However, Markit’s survey of purchas- ness. sumer spending. Businesses are investing
lion, or 13 percent of the US popula- highest level on record for that gov- Programs The overall economy grew at an annu- less in machinery. And slower global
tion. Last year’s immigration increase ernment aid. ing managers showed hiring in the facto-
ry sector strengthened a bit, with the The number of people still receiving al rate of just 1.7 percent in the April- growth has cut demand for US exports.
of 400,000 people was the lowest in a Government programs did much to June quarter. Many economists believe US manufacturing activity shrank in
decade, reflecting a minimal gain of stave off higher rates of poverty. While employment sub-index edging up to 52.7 jobless benefits under regular state pro-
from 52.4. grams after an initial week of aid fell growth will stay weak in the second half August for the third straight month,
Latinos after many Mexicans already the official poverty rate for 2011 of this year. according to the closely watched national
in the US opted to return home. Some remained stuck at 15 percent, or a US employers added only 96,000 jobs 32,000 to 3.27 million in the week ended
last month, a step down from July’s Sept 8, the claims report showed. That Manufacturing in the Philadelphia survey from the Institute for Supply
11 million people are estimated to be record 46.2 million people, the govern- region shrank for a fifth straight month in Management. The contraction in the
in the US illegally. ment formula did not take into account 141,000 count. While the unemployment was the lowest level since mid-May and
rate dropped to 8.1 percent in August most likely reflected people exhausting September, suggesting demand for Philadelphia region suggests the broader
The bulk of new immigrants are noncash aid such as food stamps, American-made goods has weakened. picture hasn’t improved.
now higher-skilled workers from which the Census Bureau estimates from 8.3 percent, it was because many their benefits.
Americans gave up the search for work. A measure of US economic activity The Federal Reserve Bank of Paul Dales, senior US economist at
Asian countries such as China and would have lifted 3.9 million people
Lackluster labor market conditions declined in August for the second time in Philadelphia says its index of regional Capital Economics, said that the string of
India, contributing to increases in the above the poverty line. If counted, that
prompted the Federal Reserve last week three months, suggesting the economy manufacturing activity had a reading of - declines in the Philadelphia manufactur-
foreign-born population in California, safety net would have lowered the
to launch an aggressive stimulus pro- remains weak. 1.9 in September. That was slightly better ing survey was consistent with his fore-
New York, Illinois and New Jersey. poverty rate to 13.7 percent. gram. It vowed to buy $40 billion worth The Conference Board says its index than the August reading of -7.1 and a July cast for continued manufacturing trou-
of mortgage-backed securities each of leading indicators, designed to forecast reading of -12.9. Still, any reading below bles.