Morning Economic News - January 13, 2009

Commentary and Overnight Trading

The Conference Board's Monday report on employment was, as expected, decidedly negative. The reports news release headline predicted 2 million additional lost jobs and the reports headline index number showed employment trends below 1996 levels. Less reported, the employment trend is still not the worst situation in the last 40 years, let alone the "worst since World War II" or "since the Great Depression" as is being widely touted. Markets clearly had the bad job picture priced in and in perspective, with a 1.5% retreat in the Dow Jones Industrial Average, hardly a rout.

In early overnight trading, US stocks are little changed with the S&P and NASDAQ, which fell more on Monday, up slightly and the DJIA down a handful of points. The Nikkei isn't faring as well, down nearly 5%. Oil is down 3%, with another $6 to fall if Goldman Sachs prediction of $30 oil is going to happen. The dollar is up against the Canadian dollar, euro and pound, but continues to deteroriate against the yen.

Economic Indicators

Employment Trends Index - December 2008

• Monthly Change: Down 1.6%


• Year-to-year Change: Down 16%

What I'm Reading

U.S. Seeks the Rest Of Bailout Cash

Bush requested the second half of the financial-rescue
funds on behalf of Obama. Senate Republicans, including Tom Coburn, are
expected to be a tough sell.

Obama Reconsiders Proposed Tax Credit for Hiring

Obama's proposed new-hiring tax credit is likely to be scaled back or scrapped in favor of renewable-energy tax breaks.

China's Exports Fall by Most Since 1999 as Global Recession Reduces Demand China’s exports fell the most in
almost a decade in December as the deepening global recession
cut demand for the nation’s toys, clothes and electronics.

Merkel's Coalition Forges Second, $66 Billion Stimulus Package for Germany German Chancellor Angela Merkel’s
coalition agreed to spend an additional 50 billion euros ($66
billion) this year and next, its second attempt to stem the
worst recession since World War II in Europe’s largest economy.

Economy May Shrink 1.5% in 2009 as `Very Deep' U.S. Recession Stymies Fed Economists slashed forecasts for
U.S. growth in 2009 and projected Federal Reserve policy makers
won’t be able to start raising interest rates until 2010,
according to a monthly Bloomberg News survey.

Japan's Current-Account Surplus Narrowed 66% in November as Exports Slump Japan’s current-account surplus
narrowed for a ninth month in November as exports slumped by a
record in the wake of the global recession.

Finnish Economy Shrank 1.6% in October on Crisis for First Drop Since 2005 Finland’s economy contracted for the
first time in three and a half years in October on waning global
demand for Finnish goods.

New Zealand Foreign Currency Credit Rating May Be Cut on Deficit, S&P Says New Zealand’s AA+ foreign-currency
credit rating may be cut if the nation’s current account deficit
and overseas debt begin to curb growth and investment, Standard
& Poor’s said.

U.K. Economy Slumps Most Since 1989 as Home Sales Drop, Lobby Groups Say The British economy slumped the most
in at least two decades during the fourth quarter and home sales
dropped to the lowest since the measure began in 1978 as the
recession deepened, reports by lobby groups showed.

Trade Deficit in U.S. Probably Shrank to Four-Year Low as Oil Prices Fell The U.S. trade deficit probably
shrank in November to the lowest level in more than four years
as oil prices plunged, economists said before a report today.

Goldman Forecasts South Korea's First Recession in a Decade on Export Drop Goldman Sachs Group Inc. forecasts
South Korea’s economy will shrink this year, reversing a
previous prediction for growth because of a slump in exports.

Philippine Exports Fall a Second Straight Month as Electronics Sales Drop Philippine exports fell for a second
consecutive month in November as the global recession damped
demand for disk drives and mobile-phone chips made by Intel Corp.
and other manufacturers in the country.