President Barack Obama and Sen. Ted Kennedy participate in a national service event at The SEED School of Washington, D.C., April 21, 2009.

US youth unemployment

The US youth unemployment rate hit a record 18.5% in July 2009, the highest level for that month since 1948, the Labor Department said Thursday

The youth unemployment rate, which covers people 16 to 24 years old, was down from 19.9% in June, but was the highest for the month of July since the Labor Department began tracking it.

In the period April-July, the number of employed young people rose by 1.6 million to 19.3 million, according todata.

The proportion of young people working, was 51.4%, another historic low for the month of July, which is expected to be the peak month for youth summer jobs. At in 1989, the proportion was about 18 percentage points higher.

Dell

Dell, the world's second-biggest PC maker, on Thursday reported better than expected profits and sales, and said revenue should rise through the second half of the year.

Last January, the company announced the closure of its Limerick plant, with the direct loss of 1,900 jobs.

Dell reported a net profit of $472m, or 24 cents a share, in its second quarter to July 31st, down from $616m, or 31 cents a share, a year earlier.

Excluding exceptional items, the company posted a profit of 28 cents a share, compared with analysts' average estimate of 23 cents a share. Revenue fell 22% to $12.8 billion.

Dell said if current demand trends continued, it expected revenue for the second half of the year to be stronger than the first half.

Dell said it continues to build its emerging country presence as combined revenue from the BRIC countries - -Brazil, Russia, India and China - - grew 16% sequentially. Sales in BRIC now comprise 10% of total company revenue.

Results detail

US

Goodbody economist Deirdre Ryan commented: US growth data confirm the worst is behind - - "The continued moderation in the rate of decline in US GDP makes it increasingly likely that Q3 will mark the end of the recession, which has now stretched to 4 consecutive quarters of declining output. The release of yesterday’s data for the second quarter left the initial growth estimate unchanged (a -1% annualised quarterly decline, -3.9% yoy), although the breakdown seen minor upward revisions to consumption and government spending, with a greater drag from inventories. Since the end of the last quarter we have had a slew of more positive data releases on the US. Payroll declines have continued to ease (touched an 11 mth low in July), while manufacturing output has risen steadily. Furthermore, numerous housing market indicators have bounced from trough levels.

However, it is the trends in consumer spending which are most noteworthy. Following declines in the range of -3.1% - -3.5% in the second half of last year (on an annualised basis), consumer spending managed a flat outturn in the first half of 2009, although Q2 spending was still 1.8% below levels seen a year previously. The fiscal stimulus has clearly played a role in this and the consumer will have to wean itself off this dependence in the quarters ahead. We remain cautious on the prospects for the consumer in the near term, given that (1) unemployment is still on an upward trajectory, albeit at a slower rate and (2) earnings continue to fall. Nevertheless, the arguments around further severe consumption declines are beginning to fade and a flat outturn for consumer spending may be achieved in the second half of the year (annualised). In this light, today’s personal income and spending report for July will provide an interesting insight into the shape of the consumer at the beginning of Q3."

Jeffrey Lacker, president, Federal Reserve Bank of Richmond, who is a voting member on the interest-rate setting FOMC committee, said in a speech on Thursday that while the Fed has undertaken an unprecedented easing in monetary policy in response to the financial crisis, Lacker said the central bank has“the tools to contract our balance sheet and remove monetary stimulus when we need to do so.”

“The harder problem is choosing when and how rapidly to remove stimulus as the recovery begins.”

Bernanke was the victim of identity theft

Fed chairman Ben Bernanke was a victim of identity theft last year, a Federal Reserve spokesman said Thursday, confirming a Newsweek magazine article that reported he was  a victim to an elaborate fraud headed by a ringleader known as “Big Head.”

“Identity theft is a serious crime that affects millions of Americans each year,” Bernanke said through the Fed spokesman. “Our family was but one of 500 separate instances traced to one crime ring. I am grateful for the law enforcement officers who patiently and diligently work to solve and prevent these financial crimes.”

Newsweek reported that last summer a thief stole his wife’s purse from a Capitol Hill Starbucks coffee shop, taking the couple’s joint check book, her driver’s license, Social Security card and four credit cards.

Some days later, someone started cashing checks on the Bernanke family bank account, documents show.

US banks

The Wall Street Journal reports that the banking industry continues to deteriorate, with federal regulators adding 111 lenders to their list of endangered banks in the latest quarter, even as the economy shows signs of stabilizing.

Data released Thursday painted a gloomy picture of the state of banking.

The government fund that protects consumer deposits fell to its lowest level since 1993. The continuing woes, which come despite trillions of dollars in government rescue financing and a rebounding stock market, raised questions about how quickly the economy can revive.

The Federal Deposit Insurance Corp. said it had 416 banks on its "problem list" at the end of June, equivalent to about 5% of the nation's banks, up from 305 at the end of March and 117 at the end of June 2008. Problem banks had a combined $299.8 billion of assets at the end of June, compared with $78.3 billion a year ago.

US markets

The Dow Jones Industrial Average rose for an eighth straight session, gaining 37.11 points, or 0.4%, to 9580.63. The last eight-day rising streak was in the period ended April 10, 2007.

Component Boeing jumped 8.4% after the company said it expects its first flight of the mid-range 787 Dreamliner by the end of the year.

The Nasdaq Composite Index added 0.2% and the S&P 500 rose 0.3%.

Asia

Japanese core consumer prices fell  in July at the fastest annual rate on record.

The jobless rate, which includes subsidised workers, also rose to a record high 5.7% ahead of Sunday's election.

The ruling LDP party which has been in power almost continuously since 1955, warned this week that a landslide for the Opposition would make Japan, a one-party state.

Core consumer prices, which exclude volatile fresh food prices but include oil costs, fell 2.2% in the year to July. The so-called core-core consumer price index, which strips out food and energy costs, had its biggest annual fall in seven years at - 0.9%.

The MSCI Asia Pacific Index rose 0.5% Friday and rose 2.7% this week.

The benchmark has risen 61% from a more than five- year low on March 9th.

The Nikkei 225 rose 0.6%; Australia’s S&P/ASX 200 Index gained 0.9% and China’s Shanghai Composite Index dropped 2.9%.

Asia-Pacific benchmarks