Unemployment keeps rising across UK [presstv.ir]

A leading economic think-tank says unemployment in most parts of Britain will keep rising over the next five years to reach 10.7 percent by 2016, local media reported.

The Center for Economics and Business Research (CEBR) said the overall jobless rate could hit 10.7 percent by 2016, which would be the worst rate of unemployment since the country emerged from a recession in the mid 1990’s.

The CEBR warns that parts of the UK reliant on the public sector could be worse hit.

The coalition government’s economic policy remains focused on austerity, despite criticism that it is not working and the policy focus should shift to measures to encourage economic growth.

The impact will be strongest in Northern Ireland, where almost one in three people work in the public sector. Other parts of the UK that have a higher than average proportion of public sector jobs are Wales, Scotland and the North East of England.

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Eurozone Composite PMI® Signals Recession Says Markit; France in Renewed Decline, German Growth Weakens, Italy and Spain Contract Further [Mish]

By MISH’S Global Economic Trend Analysis

In what should have been expected, but somehow wasn’t, Eurozone weakness is across the board except for Ireland bucking the trend for now.

Markit says Eurozone Composite PMI® Signals New Recession in Eurozone

Key Points for March

  • Final Eurozone Composite Output Index: 49.1 (Flash 48.7, February 49.3)
  • Final Eurozone Services Business Activity Index: 49.2 (Flash 48.7, February 48.8)
  • France sees renewed decline, German growth

Latest PMI data provided further evidence of a mild contraction of the Eurozone private sector economy during March. The latest decline also meant that output fell over the first quarter as a whole, raising the likelihood that the economy has fallen back into technical recession.

Composite PMI Output Index by Nation

High oil prices led to a further marked increase in average input costs in March, with the impact felt at both manufacturers and service providers. Input cost inflation was the fastest for nine months, but remained below the near-record high reached one year ago. Input price inflation accelerated in Germany, Spain and Ireland, but eased in France and Italy. Italy nonetheless still saw the steepest overall increase.

Inflows of new orders fell for the eighth month running, dropping at the fastest pace so far this year. New business fell across the big-four nations, with particularly steep falls seen in Spain and Italy.

Weak demand also held down output prices, with March data signalling little change over the month.

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Eurozone Unemployment Hits 15-Year High (and About to Get Much Worse); “Official Denial” In Spain [Mish]

From MISH’S Global Economic Trend Analysis

Reuters reports Eurozone Unemployment Reaches Near 15-Year High

Unemployment in the euro zone reached its highest level in almost 15 years in February, with more than 17 million people out of work, and economists said they expected job office queues to grow even longer later this year.

Joblessness in the 17-nation currency zone rose to 10.8 percent – in line with a Reuters poll of economists – and 0.1 points worse than in January, Eurostat said on Monday.

February’s unemployment level – last hit in June 1997 – marked the 10th straight monthly rise and contrasts sharply with the United States where the economy has been adding jobs since late last year.

“We expect it to go higher, to reach 11 percent by the end of the year,” said Raphael Brun-Aguerre, an economist at JP Morgan in London. “You have public sector job cuts, income going down, weak consumption. The economic growth outlook is negative and is going to worsen unemployment.”

“With inflation remaining stubbornly high throughout the euro zone, there is very little hope of a consumer recovery,” said Jennifer McKeown, an economist at Capital Markets.

“Official Denial” In Spain

I am amused by the official denial by the Spanish Finance Minister last week. Please consider Spain reveals deep cuts to meet deficit goal

Spain announced deep cuts to its central government budget on Friday as it battles to convince European partners and debt markets it can rein in its budget deficit in the face of growing complaints from the public.

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Euro area unemployment rate

The euro area1 (EA17) seasonally-adjusted2 unemployment rate3 was 10.8% in February 2012, compared with 10.7% in January4. It was 10.0% in February 2011. The EU271 unemployment rate was 10.2% in February 2012, compared with 10.1% in January4. It was 9.5% in February 2011.

Eurostat estimates that 24.550 million men and women in the EU27, of whom 17.134 million were in the euro area, were unemployed in February 2012. Compared with January 2012, the number of persons unemployed increased by 167 000 in the EU27 and by 162 000 in the euro area. Compared with February 2011, unemployment rose by 1.874 million in the EU27 and by 1.476 million in the euro area.

These figures are published by Eurostat, the statistical office of the European Union.

Among the Member States, the lowest unemployment rates were recorded in Austria (4.2%), the Netherlands (4.9%), Luxembourg (5.2%) and Germany(5.7%), and the highest in Spain (23.6%) and Greece (21.0% in December 2011).

Compared with a year ago, the unemployment rate fell in eight Member States, increased in eighteen and remained stable in Romania. The largest falls were observed in Lithuania (17.5% to 14.3% between the fourth quarters of 2010 and 2011), Latvia (17.0% to 14.6% between the fourth quarters of 2010 and 2011) and Estonia (13.9% to 11.7% between the fourth quarters of 2010 and 2011). The highest increases were registered in Greece (14.3% to 21.0% between December 2010 and December 2011), Spain (20.6% to 23.6%) and Cyprus (6.7% to 9.7%).

Between February 2011 and February 2012, the unemployment rate for males increased from 9.7% to 10.7% in the euro area and from 9.4% to 10.1% in theEU27. The female unemployment rate rose from 10.3% to 11.0% in the euro area and from 9.6% to 10.2% in the EU27.

In February 2012, 5.462 million young persons (under 25) were unemployed in the EU27, of whom 3.272 million were in the euro area. Compared with February 2011, youth unemployment increased by 262 000 in the EU27 and by 106 000 in the euro area. In February 2012, the youth unemployment rate was 22.4% in the EU27 and 21.6% in the euro area. In February 2011 it was 21.0% and 20.5% respectively. The lowest rates were observed in Germany (8.2%),Austria (8.3%) and the Netherlands (9.4%), and the highest in Spain (50.5%) and Greece (50.4% in December 2011).

In February 2012, the unemployment rate was 8.3% in the USA. In January 2012 it was 4.7% in Japan.

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Antal Fekete Responds To Ben Bernanke On The Gold Standard

Tyler Durden's picture
Submitted by Tyler Durden on 03/21/2012 12:04 -0400

Yesterday, Ben Bernanke dedicated his entire first propaganda lecture to college student to the bashing of the gold standard. Of course, he has his prerogatives: he has to validate a crumbling monetary system and the legitimacy of the Fed, first to schoolchildrden and then to soon to be college grads encumbered in massive amounts of non-dischargeable student loans. While it is decidedly arguable that the gold standard may or may not have led to the first Great Depression, there is no debate at all that it was sheer modern monetary insanity and bubble blowing (by the very same professor!) that brought us to the verge of collapse in the Second Great Depression in 2008, which had nothing to do with the gold standard. And as usual there is always an other side to the story. Presenting that here today, is Antal Fekete with “The Gold Problem Revisited.”


Antal E. Fekete

The article The Gold Problem of Ludwig von Mises, published 47 years ago in 1965, just six years before he died (the gold standard died with him in the same year) has some breath-taking thoughts, for example, “the gold standard alone can make the determination of money’s purchasing power independent of the ambitions and machinations of governments, of dictators, of political parties, and of pressure groups”, or: “the gold standard did not fail: governments deliberately sabotaged it, and still go on sabotaging it.” But for all our admiration we would be amiss if we did not point out certain errors in his article. These are all errors of omission, and correcting them would hopefully make the Mises article even more helpful to the discriminating reader.

Mises fails to answer his own question why gold is the best choice to serve as money. Indeed, why not another commodity, or a basket of commodities? The reason is that the marginal utility of gold is unique in that it declines at a rate slower than that of any other substance on Earth. Various assets have various marginal utilities which determine their value. All of them decline, albeit at various rates. In other words, economic actors accumulate assets increasingly reluctantly, up to their satiation point that will be reached sooner or later. For gold, this point is removed farther, so far indeed that for all practical purposes it is beyond reach.

Therefore if you substituted another commodity, or basket of commodities for gold, then you would end up with a unit of value the marginal utility of which was inferior. It would decline at a rate faster than that of gold. It would be akin to substituting a yardstick made of rubber for one made of metal.

1. The futility of inflationary policies

Mises ignores the fact that newly created money can be spent not only on goods and services, but also on financial assets. This is the proverbial fly in the ointment of the inflationary argument. It is also a subtle one, so much so that the government as the would-be perpetrator of inflation often falls victim to it. It may think that it is promoting inflation while, in fact, it acts as quartermaster for deflation.

By restricting the circulation of gold money or by other means, the government can make financial speculation more attractive. In doing so it wants to reduce the amount of money available for buying goods and services. This strategy of the government and its pseudo-economists consists precisely in channeling enough of the newly created money into speculative ventures so that the untoward consequences of price and wage rises will not occur, or they will occur later, so that the causality relation is obscured.

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Eurozone Unemployment Rates

  • Eurozone Average 10.7%
  • Spain 23.2%
  • Greece 20.9%
  • Ireland 14.8%
  • Portugal 14.8%
  • Latvia 14.7%
  • Lithuania 14.3%
  • Estonia 11.7%
  • Cyprus 9.6%
  • Italy 9.2%
  • France 9.4%
  • Germany 5.8%
  • Luxembourg  5.1%
  • Netherlands 5.0%
  • Austria 4.0%

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