Entries in Global Economy (7)


International Monetary Fund Lowers Global Growth Forecast for 2012

Comstock Images/Thinkstock(NEW YORK) -- More than ever the U.S. is part of the global economy, with millions of American workers depending on jobs linked to imports and exports.  

But a new warning that the world's economy has weakened further could mean a slowdown for global trade and the biggest threat out there to American jobs.

In its latest update, the International Monetary Fund forecasts global growth of 3.3 percent this year -- down from an estimate of nearly 4 percent just three months ago.  Slower growth is also forecast for 2013.

"Risks for a serious global slowdown are alarmingly high," says the IMF's World Economic Outlook.

The report comes one day after a forecast of a deepening slowdown in China, the world's second largest economy.  India -- another engine of growth -- is also facing a serious slowdown. 

Copyright 2012 ABC News Radio


Geithner ‘Encouraged’ by Europe’s Plan to Tackle Economic Crisis

Official White House Photo by Pete Souza(LOS CABOS, Mexico) -- Treasury Secretary Timothy Geithner said Tuesday he is encouraged that European leaders appear ready to make a more forceful response to the financial crisis threatening the global economic recovery.

Speaking at the close of the G20 summit, Geithner said European leaders are focused on steps intended to stabilize the eurozone and promote growth in the region.

“We’re encouraged by what we’ve heard from the European leaders today and by the broad focus around the world we’re seeing to the need to strengthen economic growth,” Geithner told reporters.

European leaders are expected to detail their plan at a “critical” summit in Brussels at the end of next week.

“They’ve laid out a framework with a series of very important key elements,” Geithner said, including proposals to build a “stronger framework to make their financial system work.” He said he was also encouraged by their plans to work with Greece to make sure it is “reforming within the European community.”

Copyright 2012 ABC News Radio


Obama Asks Euro Leaders to Publicly Discuss Solutions for Economic Crisis

Official White House Photo by Pete Souza(LOS CABOS, Mexico) -- As expected, the G20 conference came to its close with no bold agreements to resolve the economic crisis in the 17-member eurozone. President Obama said Tuesday that he had urged leaders from the European countries present -- France, Germany, Italy, and the European Union -- to at least provide a public framework as to what they want to happen so that markets and others can calm down and be reassured solutions are coming.

President Obama told reporters that what he had “heard from European leaders during the course of these discussions is that they understand the stakes, they understand why it’s important for them to take bold and decisive action and I’m confident they can meet those tests.”

“Sometimes even after they’ve conceived of approaches to deal with the crisis they have to deal with all the politics to get it done and markets are a lot more impatient,” the president said. “So what I’ve encouraged them to do is to lay out a framework for where they want to go in increasing European integration in resolving the financial pressures that are on sovereign countries, even if they can’t achieve all of it in one fell swoop, I think that if people have a sense of where they’re going that can provide confidence and break the fever.”

Asked if Europe’s failure to rally would cost him re-election, President Obama said, “All these issues, economic issues will potentially have some impact on the election but that’s not my biggest concern right now. My biggest concern is the same concern I’ve had over the last three and a half years, which is folks who are out of work or underemployed or unable to pay the bills, what steps are we taking that potentially put them in a stronger position.”

Copyright 2012 ABC News Radio


Is the Economy Really Slowing Down?

Comstock Images/Thinkstock(NEW YORK) -- A small rise in layoffs reported by the Labor Department on Thursday and disappointing home sales for March, plus signs of slowing manufacturing activity, are fanning fears about the recovery.

Meanwhile in Europe, bond interest yields have been rising in recent days. 

After several months of optimism about growth, some experts are casting doubt about the strength of the U.S. and global economy.  Christine Lagarde, managing director of the International Monetary Fund, warns of “dark clouds on the horizon.”

But many economists and market watchers say it’s too early to draw any conclusions.

“We’re going to have to give it another couple of weeks and see if this trend continues,” says Art Cashin of UBS Financial.

Asked for his view of the latest jobs and housing figures, David Abuaf, chief investment officer of Hefty Wealth Partners, says, “Even though the numbers look bad at first, the more research and the more work that we do, the better the figures look.”

Copyright 2012 ABC News Radio


Gas Price Drops Six Cents, Easing Drivers' Fears

Jupiterimages/Thinkstock(WASHINGTON) -- In the past week the national average price of gasoline has dropped six cents to $3.65, according to the Energy Department.

This marks the sixth week in a row in which retail gas prices have dropped -- a total of $0.25 in that period. On May 9, drivers were paying $3.97 with fears that $4+ prices were in store for the summer driving season.

Concerns about the U.S. and global economy and the continuing turmoil in North Africa and the Middle East have led to instability in oil and gas prices.

Copyright 2011 ABC News Radio


Japan's Disaster Threatens to Take a Toll on Exports

Mark Renders/Getty Images(TOKYO) -- America's motorists may soon have another worry to put alongside the rising price of gas: a reduction in the number of fuel-efficient Japanese cars available for purchase.

The terrible human toll from last week's earthquake and tsunami still is being counted. But Japan's manufacturing sector likewise was hit hard and is still reeling. U.S. imports of everything from cars to consumer electronics to semiconductors eventually may be affected.

The biggest U.S. imports from Japan include passenger cars ($41.4 billion), automotive accessories ($8.8 billion), computer accessories ($6.7 billion) and semiconductors ($3.5 billion).

For the moment, the big Japanese car makers have plenty of inventory sitting on U.S. wharves, awaiting delivery to showrooms. But factories in the region, including ones belonging to Sony and Toyota, have chosen to temporarily suspend operations so that available electricity can be put to much-needed domestic household use.

The time required to ship goods to the U.S. by sea averages 15 to 20 days, so, for that much time at least, the pipeline of goods will continue to deliver at pre-disaster levels.

Copyright 2011 ABC News Radio


Bernanke on Egypt: 'Unfair' to Blame the Fed for Rising Food Prices

Photo Courtesy - Getty Images(WASHINGTON) -- Federal Reserve Chairman Ben Bernanke said Thursday that it was “unfair” to blame the Federal Reserve’s monetary policies for inflation in emerging markets and defended the Fed against accusations that it has contributed to the rise of global food prices, which have fueled political instability in countries like Tunisia and Egypt. 

Bernanke was asked about the situation in Egypt during a rare question-and-answer session following a speech Thursday at the National Press Club in Washington, D.C. He initially rejected the premise of the question, but went on to discuss food prices.

“The most important development globally is the fact that the world is growing more quickly, particularly in emerging markets,” he explained. “I think it’s entirely unfair to attribute excess demand pressures in emerging markets to U.S. monetary policy because emerging markets have all the tools they need to address excess demand in those countries…It really is up to emerging markets to find the appropriate tools to balance their own growth.”

Bernanke repeated that the Fed's monetary policy is aimed at stabilizing the economy and said that no one could argue the U.S. economy was “overheated” or “growing too quickly.”

During his wide-ranging speech, Bernanke defended the Fed’s controversial decision to purchase up to $600 billion in Treasury bonds in an effort to stimulate the economy.

“A wide range of market indicators supports the view that the Federal Reserve's securities purchases have been effective at easing financial conditions,” he said.

Bernanke also pushed aside fears that increasing fuel prices may lead to more inflation. While Bernanke said there have been increases in “some highly visible prices,” such as gasoline, he stressed that “overall inflation remains quite low.”

Copyright 2011 ABC News Radio

ABC News Radio