See Search Box
lower down this column for searches of Finfacts news pages. Where there may be
the odd special character missing from an older page, it's a problem that
developed when Interactive Tools upgraded to a new content management system.
Welcome
Finfacts is Ireland's leading business information site and
you are in its business news section.
We
provide access to live business television and business
related videos from: Bloomberg TV; The Wall Street Journal;
CNBC and the Financial Times. Click image:
Bloomberg says full employment ain’t what it used to be.
Economists since the mid-1990s have reckoned that full employment was equivalent to about a 5 percent unemployment rate, taking into account the time required to switch jobs. Now Nobel Prize winner Edmund Phelps and Pacific Investment Management Co. Chief Executive Officer Mohamed El-Erian say the fallout from the deepest recession in more than five decades is driving the so-called natural rate higher, perhaps to 7%.
“We are in the midst of a large and protracted increase in both actual unemployment and its natural rate,” said El-Erian, 51, whose Newport, California-based company manages the world’s largest bond fund. Even with the economy growing, “it will take at least a couple of years” for joblessness to fall to 7% from 9.7% now.
The Wall Street Journal reports today that US business starts fell 14% from the third quarter of 2007 to the third quarter of 2008; the 187,000 businesses launched in that quarter were the fewest in a quarter since 1995. The number ticked up slightly in the fourth quarter, the latest data available. But those new establishments created only 794,000 jobs, the fewest since the government began tracking the data in 1993.
The recession may have ended, but history suggests business creation won't rebound quickly. The 2001 recession officially ended in November of that year. But business starts didn't begin growing again until mid-2003. A sustained lull in company formation "could have huge implications for the economy down the road," Headd says.
To be sure, as in past recessions, some laid-off workers are starting businesses to stay afloat, or testing long-held dreams. The Kauffman Foundation, a nonprofit research group that promotes entrepreneurship, says more Americans started businesses last year than in 2007. Kauffman cites research by University of California, Santa Cruz, economist Robert Fairlie, who analyzes different BLS (Bureau of Labor Statistics) data.
Xerox
Xerox today announced plans to buy business-services provider Affliliated Computer Services Inc. in a deal initially valued at $6.4 billion, as the copier company follows other technology giants such as HP and Dell in increasing services revenue.
Xerox has been hit by falling sales of copiers and printers and accessories' sales of ink, toner and paper. The deal for Dallas-based ACS is expected to triple Xerox's services revenue to an estimated $10 billion next year from 2008's $3.5 billion.
Harry Rady, of Rady Asset Management, and Robert Stein, of First Trust Advisors, share their market insight:
US markets
The news of mergers and the expectations of good third quarter earnings, boosted sentiment Monday.
The Dow Jones Industrial Average rose 148 points, up 1.5%, at 9,811, with 29 of its 30 components gaining.
On the New York Mercantile Exchange, oil for November delivery is trading at $67.46 up $1.44 from Friday's close. In London, Brent crude for November delivery is trading at $65.99 a barrel.
Currencies
The euro is trading at $1.4663 and at £0.9230.
For live currency updates, check the right-hand column of the Finfacts home page.The dollar traded at a record low $1.6038 per euro on July 15, 2008.
