Murky Picture for U.S. Jobs
The U.S. economy added 163,000 jobs in July, surprising forecasters who had predicted a 100,000 increase. This compares with a revised 64,000 in June, showing the pace of hiring accelerated. Even still, the unemployment rate rose to a five-month high of 8.3 percent, from 8.2 percent, making this the 42nd consecutive month of unemployment above 8 percent. The U.S. produced even more goods and services than it did before December 2007, but only with 3.8 million jobs of the 8.8 million it lost during the 18-month recession that ended in June 2009. The data may prompt the U.S. Federal Reserve to take action next month, and it could give Republican candidate Mitt Romney a chance to steer the debate away from his tax record and fiscal proposals, and attack President Barack Obama about the “weakest recovery since the Great Depression.”
Syria: the Conflict Spreads
Fighting erupted in Hama, Aleppo, and Damascus, where a major Palestinian refugee camp suffered a mortar attack. Meanwhile, the United Nations General Assembly voted for a toothless resolution condemning the Syrian government for the violence. Russia, who vetoed three resolutions for sanctions at the U.N. Security Council, blamed the rebels for refusing to negotiate and told the council it had undermined Special Envoy Kofi Annan’s work towards a peaceful resolution. Syrian President Bashar al-Assad’s army is now under pressure as its weapons have either been commandeered by rebels or are becoming less potent against the opposition. Russia’s Defense Ministry denied sending ships and troops to help Assad. British Foreign Secretary William Hague said the U.K. would step up help to the rebels.
Markets Optimistic, Even as Spain Gets Closer to Bailout
European stocks soared today as investors saw hope in the European Central Bank’s decision to delay action yesterday. In Spain, Prime Minister Mariano Rajoy said he would consider asking for bailout money to buy Spanish bonds, but not without examining the conditions attached to such a plan. In a report published last night, the International Monetary Fund urged European authorities to implement new rescue measures to prevent contagion to smaller neighbors as well as the U.S., the U.K., China, and Japan. German Chancellor Angela Merkel said today her coalition will not stand in the way of bond purchases by the ECB, even if the Bundesbank said many times it would not play along.
RBS Loses $3 Billion, Sacks Staff over Libor
Britain’s Royal Bank of Scotland lost £1.99 billion ($3.09 billion) in the first half of the year. The bank, which became 82 percent owned by the British government after a bailout, set £260 million ($406 million) aside to compensate its customers for a computer bug in June as well as inappropriate insurance selling. It also confirmed that it sacked four employees over their involvement in the Libor scandal. RBS Chief Executive Officer Stephen Hester admitted that the banking industry’s reputation had hit “new lows,” saying this was in a “chastening period.”
U.S. Senate Committee Passes Tax Break for Wind Power
The U.S. Senate Finance Committee voted to renew a tax break for wind power, with Republican support. The American Wind Energy Association says more than 81 percent of wind farms in the country are located in Congressional districts represented by the GOP. The law would extend breaks for a year and cost $3.3 billion. U.S. Republican presidential candidate Mitt Romney has called these tax cuts a “waste of money,” and his campaign said earlier this week that he would end the subsidy.
Weekend Read: Fussbudget
Fiscal conservative Paul Ryan is embarrassed by the Bush years, which added $5 trillion to the national debt, and he is determined to propose a viable alternative. In The New Yorker.