Excerpts
Shoppers Flock to Stores But with Tighter Wallets
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Shoppers flocked to stores before dawn Friday to make the most of holiday sales across the United States, but many vowed to keep spending down in the face of a shrinking economy.
Retailers from Wal-Mart Stores [WMT 56.69 --- UNCH (0) 
] to Macy's [M 7.03 --- UNCH (0) ], Kohl's [KSS 32.71 --- UNCH (0) ] and Best Buy [BBY 21.08 --- UNCH (0) ] opened their doors in the early hours of "Black Friday," offering steep discounts to shoppers who waited in line.
"I'm here to save money. The recession is kicking in," said Tammy Williams, 36, as she stood in line waiting for a 4 a.m. ET (9:00 GMT) opening at a Kohl's in West Paterson, New Jersey. "I'm just looking for a bargain, anything to save a couple of dollars. I'll save the rest for food shopping."
The holiday weekend will test the strength of consumer sentiment, a main driver of the U.S. economy, as the country faces its worst financial crisis since the Great Depression.
Euro Zone Unemployment Rises to 7.7%, Inflation Plunges
Text Size Euro zone inflation plunged to 2.1 percent in November and unemployment rose faster than
anticipated, data showed, boosting expectations of a deep interest rate cut by the ECB next week as the economy shrinks.
Consumer inflation in the 15-country euro area slowed by 1.1 percentage point from October's annual rate of 3.2 percent, the Eurostat European Union statistics office estimated.
Market forecasts had centred on a decline to 2.3 percent.
The European Central Bank wants inflation to be below, but close to, 2 percent and has signalled it has "ample" room to cut rates on Dec. 4 if inflation pressures subside.
Most economists expect a 50-basis-point rate cut to 2.75 percent, but around a quarter of the forecasters see a deeper cut of 75-100 basis points.
Japan suffers more as their currency is overvalued due to carry trade closings - but that is something they pulled on themselves as they did not take the risks seriously enough of such an event
Text Size Japanese industrial production dropped sharply in October and manufacturers warned of even more dramatic falls in coming months, prompting warnings that Japan's recession will be even deeper and longer than previously thought.
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AP |
The bleak industrial data, combined with sliding household spending and falling retail sales, will reinforce the Bank of Japan's focus on downside risks for the world's second-largest economy, but economists remain divided on whether it will cut its already low rates even further, even as the risk of deflation grows.
Japan is now firmly caught up in the financial crisis, with its big exporters such as Toyota and other car makers facing tumbling orders from key customers in the United States, Europe -- and increasingly Asia as well.
Exporters had been the main engine of growth for Japan's economy but Takumi Tsunoda, senior economist at Shinkin Central Bank Research, said their output could post its biggest ever quarterly fall in the fourth quarter.
"Production is falling much faster than we had expected. Companies are adjusting their production very quickly. The auto makers are the worst hit, but their turmoil is starting to spill over into other sectors, such as steel makers," Tsunoda said.
Industrial output fell 3.1 percent in the month of October, more than a median market forecast for a 2.5 percent drop, and the outlook was for a record fall of 6.4 percent in November -- pointing towards an 8.6 percent contraction for the fourth quarter.
Industrial output has already been falling for three quarters of this year and, with household spending also in decline, economists warned of a longer and deeper recession ahead.
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