economy

U.S. Workers Still Haven’t Shaken the Job Worries of 2009

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Worry about being laid off has increased most for the low-income

by Lydia Saad

PRINCETON, NJ — Nearly five years since the start of the global financial crisis that spurred up to 10% unemployment in 2009 and an associated spike in job worries among U.S. workers, employed Americans continue to express elevated concerns about their job security. Workers’ worries about having their benefits and wages reduced, their hours cut back, and being laid off surged between 2008 and 2009, and time has not alleviated these concerns.

Workers Worried About Job Events, 2003-2013

The trends, from Gallup’s annual August Work and Education polls, consistently show that U.S. workers exhibit the most widespread concern about having their benefits reduced, and that remains the case today, with 43% saying so. The percentage of workers worried about a reduction in benefits initially rose nearly 20 points in August 2009, to 46% from 27% the year prior. Since then, about four in 10 have said they worry about this, still much higher than in any year from 2003 through 2008.

Worries about being laid off, having one’s wages reduced, or having one’s hours cut back all roughly doubled between 2008 and 2009, and remain at the higher levels today — between 25% and 31%.

Gallup also asks workers whether they worry that their company will move jobs overseas. Far fewer are anxious about this than about any of the direct threats to their job, pay, or benefits. And the 11% saying they worry about outsourcing today is only slightly higher than the 8% recorded in 2008 and little different from the 10% found in 2009.

Trend: U.S. Workers Worried About Outsourcing Where They Work

Fear of Layoffs Up Most Among Low-Income Workers

Workers’ concern about the most serious of the possible employment threats measured — being laid off — is up 14 percentage points today among all workers compared with August 2008. The 2008 poll — conducted one month before the fall of Lehman Brothers that precipitated cascading problems on Wall Street over subsequent weeks and months — provides a clear pre-collapse measure of worker attitudes.

Low-income Americans’ concerns about this are up the most. Forty-four percent now say they are worried about being laid off, compared with 19% in 2008 — a 25-point increase.

Concern is also up more than the average among nonwhites (a 20-point rise), union members (19 points), and government workers (19 points). Those showing below-average increased fear include American workers earning $75,000 or more annually (seven points), 18- to 34-year-old adults (seven points), and postgraduates (nine points).

Percentage of U.S. Workers Worried About Being Laid Off

Bottom Line

A great deal has transpired economically, as well as politically, in the five years since the 2008 global financial crisis unfolded. Among the more positive changes are the decrease in unemployment after it reached frightening levels in 2009 and 2010, and the surge in the stock market. Along the way, Americans’ confidence in the economy plummeted, but later rebounded to nearly positive territory, and remains less negative today.

Nevertheless, heightened fear among U.S. workers about their employment security, pay, and benefits stubbornly persists. This is particularly true among workers on the lowest economic rung, but is also evident to some degree among all workers.

How this is affecting the economy isn’t clear, but it could be somewhat distorting the labor market if workers are more reluctant than in the past to leave or change jobs. Potentially more importantly, it could be a factor keeping a damper on consumer spending, if workers feel less confident about their primary source of income. If so, this could be an important barometer of a cycle in which worker uncertainty leads to sluggish consumer spending, which in turn leads to tepid job growth.

Angola Central Bank News

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Angola holds rate steady at 10%, inflation drops further – Central Bank News.

Angola’s central bank held its main policy rate steady at 10.0 percent as inflation continued to drop and the exchange rate remained stable.
    The National Bank of Angola (BNA), which cut its rate by 25 basis points in January, said the monthly inflation rate in April was 0.6 percent, down from 0.66 percent in March, for an annual rate of 9.0 percent, down from 9.1 percent.
    The BNA has for many years strived for an inflation rate below 10 percent and since August 2012 inflation has remained below that level.
    The central bank also said credit to the economy rose by 0.18 percent in April and the average interest rate on credit of 181 days in local currency rose to 12.53 percent for retailers and declined to 13.7 percent for the corporate sector.
    The average exchange rate for the kwanza against the U.S. dollar was 96.045 at the end of April compared with 95.98 at the end of March. During April the central bank sold US $1,980 million to the market for a total of $6,232 million in the first four months.
    In 2012 Angola’s economy grew by 7.4 percent and the International Monetary Fund projects growth of 6.2 percent this year.

    www.CentralBankNews.info

National Bank of Angola website : http://www.bna.ao/ 

 

 

Brazil Central Banker’s raise rate by 50 bps to bring down inflation

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Brazil raises rate 50 bps to bring down inflation – Central Bank News.

Brazil’s central bank raised its benchmark Selic rate by 50 basis points to 8.0 percent to help bring down inflation and “ensure that this trend will continue next year.”
    In a brief statement, the Central Bank of Brazil said its policy committee, known as Copom, had agreed on the rate rise unanimously and it did not issue a bias about the future trend of policy.
    It is the second consecutive rate rise by Brazil’s central bank following a 25 basis point rise in April, bringing this year’s total rate increase to 75 basis points. In 2012 the central bank cut rates by 375 basis points in response to declining economic growth before freezing rates from November through March.
    Today’s rate rise was largely expected and follows recent warnings by the central bank’s governor that he would do “what is needed, in a timely manner, to ensure inflation declines.”
    Brazil’s inflation rate eased to 6.46 percent in the rolling one-month period through May 15 from 6.49 percent in April, close to the upper limit of the central bank’s target range of 4.5 percent, plus/minus two percentage points. It was first decline since inflation started to accelerate in July 2012.

   The central bank has forecast inflation of 5.7 percent this year and 5.3 percent in 2014.
    Brazil’s Gross Domestic Product expanded by 0.6 percent in the first quarter, the same quarterly rate as in the fourth quarter, for annual growth of 1.9 percent, up from 1.4 percent in the fourth quarter, continuing a rebound since hitting a recent low of 0.5 percent in the second quarter of 2012.
    Nevertheless, growth in the first quarter was below expectations as industrial output dropped, driven by a 6.6 percent drop in mining, along with lower construction activity.
    Earlier today, the central bank lowered its 2013 growth forecast to 2.93 percent from 2.98 percent but maintained the 2014 forecast at 3.5 percent. In 2012 the economy expanded by only 0.9 percent.

    www.CentralBankNews.info

 

Mozambique Central Bank news

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Mozambique holds rate steady, signs of slower activity – Central Bank News.

Mozambique’s central bank held its benchmark standing facility rate steady at 9.50 percent, saying it would intervene in money markets to ensure that the monetary base does not exceed 39.70 billion meticais by the end of May compared with 38.81 billion at the end of April.
    The Bank of Mozambique (CPMO), which has held its rate steady this year after cutting by 550 basis points in 2012, said indicators of the economic climate pointed to lower economic activity, interrupting the upward trend that had been seen since July last year, while expectations regarding demand also showed a decline though employment prospects remained positive.
    Mozambique’s inflation rate rose to 4.79 percent in April, up from 4.27 percent, though well below a peak of 16.6 percent at the end of 2010.
    “The behavior of inflation in the first four months of the year reflects a scenario of a difficult early year, marked by floods that affected the food supply in some markets, especially fruits and vegetables, as well as the increase in average prices of some commodities in the international market, which weighed on domestic inflation, without neglecting the strengthening of the U.S. dollar in the domestic foreign exchange market,” the CPMO said.


    Following its recent visit to Mozambique, the International Monetary Fund (IMF) forecast that inflation would remain around 5-6 percent in the medium term despite the declining trend that was interrupted by the floods.
    The IMF said Mozambique’s economy remains robust, “reflecting the rapid expansion in coal production as well as in financial services, transport and communications, and agriculture.” 
      Last month the central bank cut its 2013 growth forecast to 7 percent from a previous 8 percent due to extensive flooding in the southern and central areas of the country in the first few months of the year, which affected mining output and agriculture. In 2012 the economy grew by 7.4 percent.
    Mozambique’s Gross Domestic Product expanded by 2.3 percent in fourth quarter of 2012 for annual growth of 8.3 percent, up from a rate of 6.9 percent in the third quarter.
    The IMF also forecast that Mozambique’s economy would expand by around 7 percent this year as mining expands and agricultural production recovers from the floods.
     The central bank said the metical was quoted at 30.02 against the U.S. dollar on the last day of April, equivalent to a monthly appreciation of 0.20 percent compared with a depreciation of 0.30 percent in the previous month, taking the cumulative and annual depreciation to 1.73 percent and 9.4 percent, respectively.

    www.CentralBankNews.info

 

ECB European Central Bank cuts rate by 25 bps to 0.50%

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ECB cuts rate by 25 bps to 0.50% – Central Bank News.

The European Central Bank (ECB) cut the rate on its benchmark refinancing facility by 25 basis points to 0.50 percent, as widely expected, along with a 50 basis point cut on the rate on its marginal lending facility to 1.0 percent. The rate on its deposit facility will remain steady at 0.0 percent, the ECB said in a brief statement.
   ECB President Mario Draghi will comment on the decision by the ECB council at a press conference later today.
    Speculation had intensified in recent days that the ECB would cut rates following news that the inflation rate for the 17 nations sharing the single currency fell to 1.2 percent in April, the lowest since February 2010, and well below the ECB’s target of inflation that is below but close to 2 percent.
    Economic recession, growing unemployment and recent comments by ECB council members also fueled speculation of a rate cut. Last month Germany’s Jens Weidmann, head of the Bundesbank, said the ECB would only cut rates if the economic situation worsened and then both Draghi and Klaas Knot of the Netherlands central bank said the economic situation was not improving.
    Last month at the ECB’s press conference, Draghi said the bank was keeping a close eye on economic data for its impact on monetary policy and was ready to act. He also said the ECB was looking at various instruments and tools to stimulate economic activity.

    The unemployment rate in the euro zone rose to 12.1 percent in Mach from 12.0 percent, the highest level since Eurostat, the European Union’s statistics office, started collecting the data in 1995.
    The euro zone’s Gross Domestic Product shrank by 0.6 percent in the fourth quarter of 2012, its fifth quarterly contraction in a row, for an annual decline of 0.9 percent, up from 0.6 percent in the third quarter. Economist forecast a further contraction in the first quarter of this year.
    Global policy makers have also put pressure on the ECB to stimulate the economy with the International Monetary Fund’s managing director, Christine Lagarde, last month saying the ECB still has room to manoeuvre and could cut rates.

    www.CentralBankNews.info

Mexico Central Bankers hold rate steady

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Mexico holds rate steady, says higher inflation temporary – Central Bank News.

Mexico’s central bank held its benchmark target for its overnight rate steady at 4.0 percent, saying the recent rise in inflation was temporary and there are no widespread pressures so inflation should resume its downward trend in June and then gradually move toward’s the bank’s 3.0 percent target.
    The Bank of Mexico, which last month cut its rate for the first time since July 2009 but stressed it was not embarking on a new cycle of easing, said inflation was expected to remain high in April and May and then settle around 3-4 percent during the second half of the year before declining to around 3 percent in 2014.
    A rise in Mexico’s inflation rate to 4.72 percent  in the first half of April from 4.25 percent in March and 3.55 percent in February strengthened expectations that the bank would not cut rates further in an attempt to dampen the rise in the peso and temper the inflow of capital.
    Mexico’s core inflation rate is expected to remain close, and even below, the bank’s 3.0 percent target for most of 2013 and 2014, the central bank said, adding that it would keep a close eye on prices to ensure that there are no second-round effects of the rise in inflation.
    Mexico’s economy continues to show signs of weakness, further reducing inflationary pressure, and downside risks to economic activity prevail from the possibility that recent slowdown in the U.S. economy could intensify, the bank said.
    “On balance, significant downside risks to global economic growth prevail,” the central bank said, adding that Japan’s growth prospects had improved from its “unprecedented monetary and fiscal stimulus” but there are doubts of the effectiveness of its strategy in the medium term given the uncertain transmission channel through which the Bank of Japan is operating.
    With weak global activity and declining international raw materials prices, the inflationary outlook remains favourable in most countries and monetary policy is expected to remain accommodative in advanced and emerging economies and “in some cases additional relaxations could occur,” it said.
    Mexico’s peso has risen by more than six percent against the U.S. dollar this year and its exports declined by 2.9 percent in February when the economy only expanded by 0.2 percent from January for annual growth of 0.4 percent, according to the national statistics office’s IGAE index, which captures most of the components of Gross Domestic Product.
    The low growth in February was caused by a 1.2 percent drop in industrial output while agriculture and services registered higher growth.
    In the fourth quarter of 2012, Mexico’s GDP rose by 0.8 percent from the third quarter for annual growth of 3.2 percent, the same rate as in the third quarter.
    Mexico’s economy is forecast to grow by around 3.5 percent this year, down from 2012’s estimated 3.9 percent.
    Last month the central bank said inflation was expected to rise to around 4 percent in coming months before settling down to a rate of about 3.0 percent in the second half and in 2014.

    www.CentralBankNews.info