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Weekly Industry Crib Sheet: Initial Jobless Claims Plummet to Nearly 4-Year Low : IMT Industry Market Trends
U.N. Warns of Looming Economic Downturn
The global economy is forecast to grow by just 0.5 percent in 2012, essentially contracting on a per-capita basis, unless rapid steps are taken to resolve international debt issues, improve employment and repair an ailing world financial system, according to a new United Nations report.
The latest annual U.N. World Economic Situation and Prospects study projected that if conditions were relatively positive over the coming year, average economic growth could reach 2.6 percent in 2012 and 3.2 percent in 2013, but this outcome would depend on the Eurozone sovereign debt crisis being contained (including cutting Greece's debt in half) and stronger fiscal policy measures.
"Failure of policymakers, especially those in Europe and the United States, to address the jobs crisis and prevent sovereign debt distress and financial sector fragility from escalating, poses the most acute risk for the global economy in the outlook for 2012-2013," according to an announcement of the findings. "The developed economies are on the brink of a downward spiral enacted by four weaknesses that mutually reinforce each other: sovereign debt distress, fragile banking sectors, weak aggregate demand (associated with high unemployment and fiscal austerity measures) and policy paralysis caused by political gridlock and institutional deficiencies."
The U.N. explained that all of these weaknesses are currently present in the global market, but a further worsening of one of them could "set off a vicious circle leading to severe financial turmoil and an economic downturn." The problems are more likely to affect developed economies, as emerging markets are forecast to grow an average of 5.4 percent in 2012 and 5.8 percent in 2013. In the positive scenario, U.S. economic output would grow 1.5 percent in 2012 and 2 percent in 2013.
"In the downside scenario, economic growth of only 0.5 percent would not keep pace with population growth, resulting in a downturn in average per capita income for the world," Reuters reports. "In the downside scenario, the European Union economy would contract by 1.6 percent in 2012, with Germany, France and Britain all sliding into recession."
Obama Administration says No, for Now, to Keystone Pipeline
The Obama administration last week rejected, for now, the construction of the $7 billion Keystone XL oil pipeline from Canada to the Gulf of Mexico, saying a congressionally imposed deadline didn't allow enough time to review the project's environmental impact.
President Obama's decision, which put the pipeline on hold following a review that began in 2008, was blasted by critics, including industry groups and Republicans.
"The Administration has exhaustively reviewed the environmental impact of the pipeline for more than three years and has definitively concluded that no significant risks stand in the way of constructing the pipeline," National Association of Manufacturers (NAM) President and CEO Jay Timmons said in a statement. "The President knows this and manufacturers are deeply disappointed that he has chosen to ignore this fact."
Former Massachusetts Governor Mitt Romney, one of the frontrunners for the Republican presidential nomination, said Obama demonstrated a "lack of seriousness" through his decision. "He seems to have confused the national interest with his own interest in pleasing the environmentalists in his political base," Romney said in a statement.
The administration rejected the attacks, arguing that Congressional Republicans rushed a Feb. 21 deadline to approve the project before a full assessment of the pipeline's impact was conducted.
"This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people," Obama said in a statement. "I'm disappointed that Republicans in Congress forced this decision, but it does not change my Administration's commitment to American-made energy that creates jobs and reduces our dependence on oil."
While the president's action does not preclude later approval of the project, it sets up a partisan fight over energy, jobs and regulation that will most likely persist through the November election, the New York Times notes.
Jobless Claims Plummet to Nearly Four-Year Low
New initial jobless claims dropped in the latest week reported, offsetting increases from the prior week and continuing the general downward trend for unemployment figures. According to the U.S. Department of Labor, seasonally adjusted unemployment claims for the week ending January 14 plunged by 50,000 to a total of 352,000, the lowest level since April 2008. The four-week moving average, which smoothes out volatility, dropped by 3,500 to 379,000.
"Jobless claims, which tend to be volatile week to week around holidays, have trended down over the past month, a sign employment may pick up after payrolls grew by 200,000 in December," Bloomberg News reports. "Gains in incomes, combined with less inflation, will probably underpin household spending, which accounts for about 70 percent of the world's largest economy."
Jobless claims have generally continued to decline since hitting their 2011 peak of 478,000 in April and remain below 400,000, which economists consider a key threshold for healthier conditions within the U.S. labor market. However, the latest decrease may be more indicative of temporary seasonal fluctuations that long-term improvement.
"The number of claims usually gyrates in January owing to the end of seasonal jobs filled during the holiday period running from Thanksgiving to Christmas," MarketWatch explains. "In the first or second week of January, claims tend to rise to the highest level of the year on an unadjusted basis. That's usually followed by a sharp decline. Labor economists try to adjust for seasonal variations but their efforts sometimes fall short."
As a result, more accurate readings on jobless rates typically don't arrive until late January or February. According to the most recent monthly employment situation report, employers added 200,000 jobs in December, while the unemployment rate fell to 8.5 percent.
Annual Cost of U.S. Work Injuries and Illnesses: $250 Billion
Job-related injuries and illnesses in the U.S. cost the nation much more than generally assumed, according to new research based on an extensive evaluation of more than 40 data sets from sources that track work-related injuries and illnesses as well as their direct medical and indirect productivity costs.
In the first comprehensive review of its kind since 1992, J. Paul Leigh, professor of public health sciences at the University of California at Davis, estimates that occupational injuries and sick days cost $250 billion annually. That figure is $31 billion more than the direct and indirect costs of all forms of cancer, $76 billion more than the cost of diabetes and $187 billion more than the cost of strokes, the researchers say.
The study, published in health journal The Milbank Quarterly last month, strongly suggests that the U.S. should place greater emphasis on reducing work-related injuries and illnesses, especially since the costs have risen by more than $33 billion (inflation adjusted) since 1992.
"It's unfortunate that occupational health doesn't get the attention it deserves," Leigh said in an announcement of the findings. "The costs are enormous and continue to grow. And the potential for health risks are high, given that most people between the ages 22-65 spend 40 percent of their waking hours at work."
The study estimates that fatal and nonfatal workplace injuries cost $192 billion in 2007, while fatal and nonfatal workplace illnesses were estimated at $58 billion. The study also estimates a combined 9,080,100 cases of both fatal and non-fatal injury and illness with a total of 59,102 total fatalities. According to Leigh, less than 25 percent of these cases are covered by workers' compensation.
As a result, many occupational health issues go unresolved, with much of the costs absorbed by Medicare, Medicaid and employer-provided insurance, raising health-care costs for everyone.