HIGH ENERGY PRICES THREATEN WORLD ECONOMY
HIGH ENERGY PRICES THREATEN WORLD ECONOMY
2006-02-13 at 9:07:00 am #14108
High Energy Prices Threaten World Economy, Snow Says
U.S. Secretary of Treasury John Snow told world leaders on Saturday that high energy prices could hurt the global economy.
MOSCOW feb 06 – U.S. Treasury Secretary John Snow said Saturday that high energy prices are a risk to the global economy, as finance ministers from the Group of Eight countries focused on ways to defuse the threat from persistently high oil and gas prices.
Volatile energy prices have preoccupied the finance ministers in their meetings over the past few years. Past statements have emphasized raising investment in production, curbing consumption and making oil market data on reserves and inventories more transparent.
In remarks to be delivered to reporters after the meeting, Snow said Russia’s Finance Minister Alexei Kudrin was right to put a heavy emphasis on energy prices in the meetings in Moscow – the first to be hosted by Russia as the G-8′s new chairman.
“There are many sides to energy security, but, as finance ministers, we emphasized market-based solutions, transparency, and the institutional framework necessary to encourage a friendly investment climate in energy development and infrastructure,” Snow said.
Snow said he briefed ministers on President George W. Bush’s plans for increasing investment and research in clean-burning fuels. He also noted that costly energy is a particular problem for developing countries.
Snow also alluded to another long-standing risk faced by the world economy: large-scale trade imbalances.
Last week, the U.S. government reported its trade deficit grew to a record US$725.8 billion (euro606.3 billion) in 2005 and many economists worry the deficits are unsustainable and could lead to volatility of currency and bond markets.
The Bush administration has blamed diverging growth rates between the U.S. and its major trading partners over the past decade for the chasm.
“Relative growth performance, especially among the larger economies, continues to be uneven,” Snow said. “All countries, including the United States, but also the countries of Europe, Japan, developing Asia and even the oil exporters, bear a responsibility to help effect global adjustment in a way that maximizes and sustains global growth.”
Trade Deficit Hits All-Time High of $725.8 Billion
WASHINGTON FEB 06- The U.S. trade deficit soared to an all-time high of $725.8 billion in 2005, pushed upward by record imports of oil, food, cars and other consumer goods. The deficit with China hit an all-time high as did America’s deficits with Japan, Europe, OPEC, Canada, Mexico and South and Central America
Consumer demand for cars, foreign food products, and other goods drove imports up 12.9 percent to a record $2 trillion.
The Commerce Department reported Friday that the gap between what America sells abroad and what it imports rose to $725.8 billion last year, up by 17.5 percent from the previous record of $617.6 billion set in 2004.
It marked the fourth consecutive year that America’s trade deficit has set a record as American consumers continued their seemingly insatiable demand for all things foreign from new cars to televisions and electronic goods.
The increased foreign competition has helped to keep the lid on prices in this country, but critics say the rising trade deficit is a major factor in the loss of nearly 3 million manufacturing jobs since mid-2000 as U.S. companies moved production overseas to lower-waged nations. Many economists believe those manufacturing jobs will never come back.
“Such a huge trade gap undercuts domestic manufacturing and destroys good U.S. jobs,” said Richard Trumka, secretary-treasuer of labor’s AFL-CIO. “America’s gargantuan trade deficit is a weight around American workers’ necks that is pulling them into a cycle of debt, bankruptcy and low-wage service jobs.”
Sen. Byron Dorgan, D-N.D., said the new deficit figure showed that “our trade policy is an unbelievable failure that is selling out American jobs and weakening our economy.”
Last year’s deficit reflected the fact that imports rose by 12.9 percent to an all-time high of $2 trillion, swamping a 10.4 percent increase in exports, which reached a record high of $1.27 trillion.
For December, the trade deficit edged up a slight 1.5 percent to $65.7 billion, the third highest monthly figure on record.
January job cuts in U.S. top 100,000
CHICAGO: U.S. employers announced 103,466 job cuts in January, up 12 percent from January 2005, when job cuts totaled 92,351.
“It was the second consecutive month in which more than 100,000 planned job cuts were announced,” Challenger, Gray & Christmas Inc., a Chicago outplacement consultancy, said Thursday in a statement.
January was down slightly, 4 percent, from December, when 107,822 job cuts were announced.
The auto industry saw the largest number of planned job cuts during January. The 36,299 announced cuts, most of which came from Ford Motor Co., were nearly three times higher than the second-ranked government and non-profit sector, the firm said. Employers in the government and non-profit sectors announced plans to cut 13,527 jobs, due in part to continued fallout from Hurricane Katrina.
The third-ranked retail sector eliminated 13,430 jobs in a post-holiday purge of seasonal workers and several major store closings by OfficeMax and Toys “R” Us