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Friday, February 27, 2009


Report: U.S. economy declined faster than government thought
The U.S. economy might have suffered a more severe downturn in the last quarter of 2008 than the government initially thought, according to a Commerce Department report scheduled for release Friday. The report is expected to point to a 5.4% contraction, substantially greater than the 3.8% estimate announced last month. The New York Times/The Associated Press (27 Feb.)

Mid-February figures set record for unemployment benefits: The U.S. Labor Department said the number of unemployed workers receiving benefits after one week of assistance reached a record 5.11 million in the week ending Feb. 14, a jump of 114,000. First-time claims for state unemployment benefits grew to a seasonally adjusted 667,000 last week, marking the highest level since October 1982. Reuters (26 Feb.)

Mexican president to U.S.: Deal with economy first
Mexican President Felipe Calderon said the best thing the U.S. can do, for itself and its southern neighbor, is to get its economy under control and headed toward recovery. Though U.S. President Barack Obama told him immigration reform is a priority for the administration, Calderon said, the most important challenge for Obama "is to solve the economic problem in the U.S." Seattle Post-Intelligencer/The Associated Press (26 Feb.)

Record 10% drop in production hits Japan's manufacturers
Japan's Ministry of Economy, Trade and Industry said it expects to see the beginnings of an industrial-production recovery next month, after announcing a 10% decline in manufacturing output in January. The ministry said it anticipates an 8.3% drop this month, with output rising by 2.8% in March. Financial Times (27 Feb.)

Goldman Sachs calls recession long-term benefit for Japan: In the long run, a recession will strengthen Japan's economy by forcing consolidation and increasing profitability for the companies that survive, said Kathy Matsui, chief strategist as Goldman Sachs. She conceded that the process will be painful in the short term. Global retrenchment in consumer markets is "the only way you're going to get meaningful industrial consolidation and rationalization," Matsui said. Bloomberg (27 Feb.)

Tighter credit, unemployment hurt EU economic confidence
The European Commission said its index of consumer and business confidence hit an all-time low this month, a development that analysts said could prompt the European Central Bank to act. The data "dashed any hope of a tentative stabilization" of Europe's economy, said Jacques Cailloux, chief euro-area economist at Royal Bank of Scotland. International Herald Tribune/Bloomberg (26 Feb.)

Japan's plummeting exports a concern for China's outlook
With Japan's export sector approaching free fall, economists are wondering how China can resist a severe economic downturn. The Norinchukin Research Institute's chief economist told Reuters that Japan's exports to China are plummeting at about the same rate as sales to the U.S., suggesting that China's economy might already be contracting. The Globe and Mail (Toronto) (26 Feb.)

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