US employment will improve towards the end of 2009

09-20-2009 14:33

Dean Maki, head of US economic research and chief US economist at Barclays Capital, stated that employment in the US will improve towards the end of 2009 on the back of the recovering economy. The Pound Sterling reached unprecedented low levels against the Single Currency and the Greenback after the Bank of England confirmed that the long-term rates for its national currency could have suffered a devaluation, caused by the slump, on which Pound-priced investments became less appealing for traders.

US employment will improve

The jobless rate will “reach a record-high below 10%,” the chief US economist commented in an interview. “We believe that the peak has been reached.” The unemployment rate rose in August to 9.7%; the highest level in twenty-five years.
He continued by saying that “employment will rise again” in three months, as it fell monthly since the end of 2007. Nevertheless, September will result in another net loss in employment in goods-producing, construction and manufacturing industries, Maki stated.
In the fourth quarter the US economy will expand by 4% and by 5% in the first quarter of the next year, while this quarter resulted in a growth of 3.5% on a yearly basis, Maki reported September 17. His earlier outlook showed an expansion of 3% for the first three months of next year.
The economic recovery has been boosted by consumer spending and by developments in the housing sector, according to Maki. “We believe that the recovery in the housing market is sustainable, while consumer spending is rising stronger that we forecasted. The availability of houses has recovered spectacularly and home prices have dropped more than incomes.”

Affected by financial slump

The start of this week’s trading session was quite gloomy for the United Kingdom, after the national central bank confirmed that the real exchange rates for the Pound Sterling could have been affected by the financial slump, which impacted the British economy more than other international economic zones. The sentiment for the Pound became more negative as a result of the central bank’s announcements and due to speculators suggesting that the Royal Bank of Scotland Group Plc may be partly sold, which also indicates that the financial slump could have impacted another British financial organization, shunning investors farther away from pound-priced assets.

Pound falls further

The British currency continues its unattractive status in comparison to other currencies since it lacks support by optimistic fundamental data. The Single Currency has been backed by positive fundamentals, while the Aussie and the Brazilian currency have been driven by commodity rates. The Pound Sterling’s forecast is being influenced by a number of causes, such as the rising jobless rate in the United Kingdom and problems in the financial segment, creating a rather negative sentiment towards the Sterling.