Key Economic Updates – Remittance Source Countries

US Jobless rate at a 5-year high

On 5 September 2008, the Labour Department reported that US unemployment rate surged to a five-year high of 6.1% in August 2008, compared to 5.7% in July this year. The private employers slashed approximately 84,000 jobs in August this year, fanning worry ahead of November's presidential vote that the economy was near recession. Peter Kretzmer, an Economist at Bank of America said “The rapid rise in the unemployment rate points to a US recession, as such an increase has never occurred outside of one.”

US Future Inflation Gauge New 6- year Low

On 5 September 2008, the Economic Cycle Research Institute (ECRI) reported that its US Future Inflation Gauge (USFIG), designed to anticipate cyclical swings in the rate of inflation, fell to a 6-year low of 109.3 points in August from 112.4 points in July this year. The institute added that the fall was driven by disinflationary moves in measures of commodity prices, labor market conditions and vendor performance.

US' August budget deficit at $111.91 billion

According to the data released by US Treasury Department on 11 September 2008, the budget deficit was $111.91 billion in August 2008, which is slightly lower than $116.97 billion recorded in August last year. The department further added that revenues and outlays fell 5.7% and 5.1% from a year earlier to $157.02 billion and $268.93 billion, respectively, in August this year. The non-partisan Congressional Budget Office forecasted that the full-year fiscal 2008 budget deficit would rise to $407 billion, compared to 2007 fiscal deficit of $161 billion.

UK unemployment rises most since 1992

On 17 September 2008, the Office for National Statistics reported that the claims for jobless benefits rose 32,500 to 904,900 in August 2008, compared to revised 27,800 jobless claims in July this year. The European Commission, the European Union's executive arm said “The U.K. economy will shrink in the third and fourth quarters, fulfilling the technical definition of a recession as two straight quarters of contraction.”

UK inflation Rises to 4.7%

On 16 September 2008, the National Statistics reported that UK's consumer price index (CPI) rose to a 16-year high of 4.7% in August, up from 4.4% in July this year, due to sharp rises in gas and electricity bills.

Canada employment seen rebounding in August

On 5 September 2008, Statistics Canada, in its August employment report, released that Canada's employment edged up 15,000 in August, following a decline in July this year. Unemployment rate remained unchanged at 6.1% in August 2008. Employment has increased 87,000 in the first eight months to August 2008, compared to an increase of 221,000 in the same period of 2007. In August, employment increased in educational services, construction, utilities, and accommodation and food services, which were partially offset by decreases in health care and social assistance, and agriculture and public administration.

UAE's inflation soars to record 13%

On 14 September 2008, Merrill Lynch reported that UAE inflation was at an all time high of 13% in first half of the year due to surging housing and food costs. The company added that Dirham's value to the weak dollar and negative real interest rates, combined with the country's booming economy, continued to add to the inflationary pressure. It expected the inflationary pressures to ease in the second half of the current year.