The global economy enters the fourth quarter of the worst year it has passed in the living memory of humankind, and it faces great risks, in light of the continuing pandemic of the new Corona virus, wreaking more damage on labor markets.
And Bloomberg News says that the bleak outlook for the American job market, the suspension of the wage subsidy program in Britain and the end of the moratorium on declaring bankruptcy of troubled companies in Germany, present a darker picture of the future of the labor market in the world.
According to estimates by the International Labor Organization, the world will lose working hours equivalent to about 245 million permanent jobs during the last quarter of this year.
The last quarter of this year began with an ominous warning, as several major companies from Walt Disney Media and Entertainment to Royal Dutch Shell Energy and German Continental for car components announced last Thursday that thousands of jobs will be cut in just 24 hours. The next day, the US Labor Department revealed that job growth in the US had slowed in September, at a time when more Americans gave up searching for work.
In addition to this questionable news, the main program to support wages with British companies will end later this month, while one of the main business organizations there said that it expects to write off more than 60 thousand jobs in the coming weeks with the end of this program.
At the same time, the renewed rise in the number of people infected with the new Coronavirus in major economies indicates the weakness of these economies, which have not yet recovered from the losses of the first wave of the pandemic. The recent outbreak of the virus in the French capital, Paris, for example, led today to the announcement of the re-closure of bars for a period of two weeks, starting tomorrow, Tuesday, and it could lead to the re-closure of restaurants. The same situation is repeated in London, according to local health officials.
Tim Aurelick, chief economist at Bloomberg News, says that the occurrence of a new wave of the Corona pandemic, mass job cuts in major American companies and the end of the wage support program in Britain, confirm the risk of high unemployment rates in the world by the end of this year. The bad news for the urgent future outlook is also bad news in the medium term, with the intensification of fears that the economic recovery will falter as a result of deteriorating world market conditions, even after the discovery of an anti-Coronavirus vaccine.
On Wednesday, the US Federal Reserve published the minutes of the meeting of the Open Market Committee on Monetary Policy Management on September 15 and 16, where it referred to the details of discussions about the new committee’s directives regarding conditions that would make it necessary to start increasing the near US interest rate. Than zero percent currently. The minutes also indicated that US monetary policy makers discussed the idea of increasing bond purchases to inject more cash into the US economy, as well as continuing strict restrictions on cash distributions to banks.
All eyes are on the Asia-Pacific region to monitor indicators of future economic developments, as the Central Bank of Australia will announce next Tuesday its decision on interest rates, while Prime Minister Scott Morrison is expected to announce a new economic stimulus package that includes spending on infrastructure projects and tax cuts aimed at extracting the economy. Aussie from its first recession in nearly 30 years.
Bank of Japan Governor Haruhiko Kuroda is also planning to address a conference next week, where he will address indicators of economic recovery and price expectations.
Markets are also awaiting the statements of European Central Bank officials, including Bank President Christine Lagarde and chief economist Philip Lane, during the current week, as it will be an opportunity to monitor any indications of whether the recent disappointing inflation data for the euro area will be sufficient to reinforce calls for the launch of a new package of measures. Economic stimulus.
Investors are awaiting the comments of the Bank of England officials to see if there is an intention to cut rates to less than zero percent. The same thing is repeated for northern European countries, especially after Norwegian Central Bank Governor Ostin Olsen surprised the markets with more pessimistic than expected comments last month.
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