France’s AAA Outlook Cut

France’s credit outlook was lowered by Fitch Ratings, which also put the grades of nations including Spain and Italy on review for a downgrade, citing Europe’s failure to find a “comprehensive solution” to the debt crisis.

According to a statement released yesterday in London, Fitch affirmed France’s AAA rating and placed Spain, Italy, Belgium, Slovenia, Ireland and Cyprus on a “Rating Watch Negative” review, which it expects to complete by the end of January.

Meanwhile, Belgium's credit rating was cut two levels to Aa3 yesterday by Moody’s Investors Service.

The move by Fitch increases pressure on the region’s leaders to end a two-year debt crisis that has seen bailouts of Greece, Ireland and Portugal. European Union leaders meeting this month in Brussels agreed to forge a tighter fiscal union as the thrust of their efforts, even as the European Central Bank resisted investor calls to ramp up its bond-buying program.

S&P Action

Fitch’s action follows reviews announced by Standard & Poor’s and Moody’s. S&P on Dec. 5 placed the ratings of 15 euro nations on review for possible downgrade, including the region’s six AAA rated countries. Moody’s had said Dec. 12 it will review the ratings of all euro countries in the first quarter of 2012 because the Dec. 9 EU summit didn’t produce “decisive policy measures” to end the debt turmoil.
 (Bloomberg)

Asian shares slipped

Asian shares still slipped due to the fear of a summit meeting to propose briliant agenda wasn't a best knockout to overcome the severe eurozone crisis. People are still in pessimist on their move. Especially it is predicted that asian economy will face a headwind due to the crisis.

Australia dollar has dropped after the unemployment rate forecast was 5.3% increase than forecast level of 5.2%. Whereas gold price seen starting to sore after global investors have left no option to stabilize their stock loss.

Australia Economy Grows More Than Forecast

Australia’s economy grew faster than estimated last quarter on consumer spending and mining-driven investment, spurring the local currency as investors pared bets on the pace of interest-rate cuts next year.

Gross domestic product rose 1 percent in the three months ended Sept. 30, after growing a revised 1.4 percent the prior quarter, the fastest pace in four years.

Currency Gains

The Australian dollar rose after the report, buying $1.0268 at 1:30 p.m. in Sydney from $1.0243.Compared with a year earlier, the economy expanded 2.5 percent in the third quarter.

China is Australia’s biggest trading partner and its demand for iron ore, coal and energy drove the nation’s terms of trade -- a measure of export prices relative to import prices .

Mining Boom

Mining increased 3.7 percent, adding 0.3 point. Private-sector business investment surged 12.9 percent from the prior quarter and 22.7 percent from a year earlier.

Government Spending
The report also showed government spending dropped 1.2 percent, subtracting 0.2 point from GDP growth. Imports rose 4.3 percent, subtracting 1 point.
The nation’s household savings ratio rose to 10.1 percent in the three months through September from 9.1 percent in the second quarter, today’s report showed.


Australia’s jobless rate fell to 5.2 percent in October as employment gained by 10,100 workers. Government data tomorrow may show unemployment stayed at that level in November, with the number of workers increasing by 10,000. (Bloomberg)

Payroll Gains Improve as U.S. Unemployment Rate Drops

Payroll gains in the U.S. improved last month, while an increase in the number of Americans leaving the workforce helped push the jobless rate down to 8.6 percent, the lowest level since March 2009.

Employment climbed by 120,000 workers in November, with more than half the hiring coming from retailers and temporary help agencies, after a 100,000 gain the prior month.

Most stocks rose, capping the biggest weekly rally since March 2009 in the Standard & Poor’s 500 Index. (SPX) The S&P 500 gained 7.4 percent this week. The yield on the benchmark 10-year Treasury note fell to 2.04 percent yesterday from 2.09 percent late the previous day. 

Europe Crisis 

There were also signs Europe’s troubles may be starting to ease. A European proposal to channel central bank loans through the International Monetary Fund may deliver as much as 200 billion euros ($270 billion) to fight the debt crisis.

Europe’s debt crisis has been a source of uncertainty on the outlook for the U.S. economy, prompting companies such as DirecTV (DTV) to keep a tight rein on spending and employment.

Household Survey

The unemployment rate, derived from a separate survey of households, was forecast to hold at 9 percent. The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force.

“While the rate is certainly a very favorable rate, I would highlight that a lot of it is because people pulled out of the workforce.

Obama said the drop in the jobless rate is a sign the recovery is getting stronger, and extending a cut in the payroll tax will provide more fuel for the economy.

Energy Efficiency 

Employment at service-providers increased 126,000 in November, including a 50,000 gain in retail trade as companies began hiring for the holiday shopping season. The number of temporary workers increased 22,300.

Macy’s Inc. (M), the second-biggest U.S. department-store chain, increased mostly part-time staff by 4 percent for the November-December shopping season. See’s Candies Inc., a chocolate maker owned by Berkshire Hathaway Inc would would add 5,500 mostly temporary workers.

Private hiring, which excludes government agencies, rose 140,000 after a revised gain of 117,000. Still, factory payroll growth slowed and construction employment dropped.

Government payrolls decreased by 20,000 in November, including a 16,000 decline on the state and local levels.

Limited Wage Gains 

 

Even as payrolls grow, limited wage gains are restraining consumers’ ability to boost spending, which accounts for about 70 percent of the economy. Average hourly earnings fell 0.1 percent to $23.18, yesterday’s report showed. The average work week for all workers held at 34.3 hours.

The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- decreased to 15.6 percent from 16.2 percent.

The report also showed an increase in long-term unemployed Americans. The number of people unemployed for 27 weeks or more climbed as a share of all jobless to 43 percent from 42.4 percent.

Whether the swoon in the unemployment rate is legitimate or not, the doves on the Fed have just been sidelined from advocating QE3, at least for the next few months. (Bloomberg)