20110905 1606 Local & Global Economic Related News.

Rubber and oil palm smallholders across the country will benefit from the move to  provide fertilizer under the soon to be launched  “Baja Negara” programme later this  month. It is aimed at helping smallholders produce  quality commodities, Rural and  Regional Development Minister Datuk Seri Mohd Shafie Apdal said. As an encouragement,  smallholders were given RM9,000 in Peninsular Malaysia and RM4,000 in Sabah and  Sarawak to replant rubber on their land, said Shafie. (The Star)  

Human Resources Minister  Datuk Dr S. Subramaniam has asked the Indonesian  Embassy to convey whatever suggestion it has on the Government’s move to allow direct  maid recruitment to the Joint Task Force which was set up on the matter. He was  responding to a comment by the Indonesian Embassy head of information, social and  cultural affairs Suryana Sastradiredja on the move to allow the hiring of maids without  going through agencies.  
• Suryana said the move opened up loopholes for human trafficking and also violated  Indonesian regulations.
• Suryana also noted that the embassy had received many complaints from directlyrecruited maids, who had run away from their employers for alleged mistreatment and  non-payment of salaries. (The Star)

U.S. industry-wide car sales rose 7.5% yoy to an annual rate of 12.1m in Aug (12.2m in  Jul). Economists expected a reading of 11.95m. (CNNMoney, Bloomberg)  

Jobs woes sink Wall Street
The Dow Jones Industrial Average was down 253.16 points or 2.2% on Friday, 2 Sept after data showing zero jobs growth in August brought investors face-to-face with the prospect of another recession. The declines left Wall Street lower for the sixth week out of seven as declining issues far outweighed winners on a light-volume day ahead of the long US Labor Day holiday weekend. Stocks had rebounded recently on expectations the Federal Reserve would introduce new stimulus to boost the sluggish economy. But the Labor Department's latest report underscores that action by the Fed alone cannot address the economy's deep problems. (Financial Daily)

The  U.S. jobless rate held at 9.1% in Aug. The reading matched economists’  expectations. (Bloomberg)

U.S. nonfarm payrolls were unchanged (0) in Aug (+85,000 in Jul), the U.S. Labor  Department said. Economists had expected a reading of 95,000. Payrolls had gained in  each of the 10 previous months.  
• Health care employment rose by 30,000 in Aug. Employment in  mining continued to  trend up in Aug (+6,000). Within  professional and business services, computer  systems design and related services added 8,000 jobs in Aug. Employment in the  information industry declined by 48,000 in Aug. Elsewhere in the private sector,  employment in construction; trade, transportation,  and utilities; financial activities; and  leisure and hospitality changed little over the month.
• Manufacturing employment was essentially unchanged in August (-3,000).
• Government employment continued to trend down over the month  (-17,000).  (Bloomberg)  

U.S. average hourly earnings for all employees on private nonfarm payrolls decreased by  3 cents, or 0.1%, to US$23.09 in Aug. This decline followed an 11-cent gain in Jul.  Economists expected a rise of 0.2%. (Bloomberg)  

A newly-formed congressional panel on deficit reduction will kick off months of arduous  negotiations that will be closely watched by financial markets hoping for a deal that puts  the  United States  on an improved fiscal path. The opening meeting of  the bipartisan  "super committee" will be held on 8 Sep, the co-chairs announced.  
• It will convene just hours before President Barack Obama unveils his latest jobs-creation  initiative to a joint session  of Congress. That initiative and the super committee's work  are both aimed at healing a U.S. economy that has been struggling to grow after a deep  recession which began at the end of 2007. (Reuters)  

A measure of  future U.S. economic growth  slipped in  the latest week, while the  annualized growth rate tumbled to its lowest level since Nov, a research group said. The  Economic Cycle Research Institute said its Weekly Leading Index eased to 122.5 in the  week ended 26 Aug from 122.7 the previous week. That was originally reported as 122.8.  The index's annualized growth rate fell to -4.3% from -2.1%, hitting its lowest level since  early Nov 10. (Reuters)  

Eurozone industrial producer prices index (PPI) picked up by 0.5% mom in Jul (0.0% in  Jun), according to a report published by Eurostat. On a yoy basis, the PPI for the eurozone  rose 6.1% in Jul (5.9% in Jun). Economists expected PPI to post 0.5% mom and 6.2% yoy  in Jul. (Xinhua, Eurostat)  

Japanese capital spending fell 7.8% yoy in 2Q (+3.0% in 1Q), as the strong yen and  slowing global demand weigh on the economy's recovery from the Mar earthquake and  tsunami. Economists expected a 1.2% rise. (Reuters)  

Japan: Eighth Japan Finance Chief Since 2008 Signals Eroding Influence
Japan’s revolving-door politics may be diminishing the nation’s global influence after Jun Azumi was appointed the eighth finance minister since 2008. Azumi, 49, was named in Tokyo last Thursday to replace Yoshihiko Noda, who became prime minister, the sixth person to have that job in five years. Already eclipsed by China last year as the world’s second- biggest economy, Japan may be impeded at international forums such as the G-7 and Group of 20 nations by the lack of continuity in its representatives. (Bloomberg)

China: ‘Hot Money’ concerns mount as yield premium jumps
Chinese government bonds’ yield advantage over US Treasuries increased in August by the most since November 2008, raising concern among officials that inflows of speculative funds will pick up. An appreciating yuan and relatively high asset returns encourage global investors to seek ways to circumvent China’s capital controls and deter overseas companies from repatriating profits, complicating efforts to tame the fastest inflation in three years. The State Administration of Foreign Exchange said last month the nation may face “relatively large” capital inflow pressure in the second half. (Bloomberg)

China’s  purchasing managers’ index dipped to 57.6 in Aug (59.6 in Jul), the China  Federation of  Logistics and Purchasing said. A reading above 50 indicates expansion.  (Bloomberg)  

China will tighten rules on  subsidies for energy-saving vehicles made by local  automakers, according to a government official. Cars will qualify for a subsidy if they have  an average fuel consumption of 6.3 liters of gasoline or lower per 100km, Xiang Dihai, a  director at the department of Economic Construction at the Ministry of Finance, said. The  current threshhold is 6.9 liters per 100km. (Bloomberg)  

Standard & Poor’s Managing Director of European Sovereign Ratings  Moritz Kraemer  said the rating of a common euroarea bond would reflect that of the “weakest” country if  jointly guaranteed. “If it is a joint and not a several guarantee, then it would be the weakest  link approach,” Kraemer said, adding that “it depends  on how the euro bond would be  structured.” (Bloomberg)

India: Manufacturing expands at slowest pace in 29 months
India’s manufacturing grew at the slowest pace in 29 months in August, adding to signs of a global slowdown and indicating interest-rate increases are curbing consumer demand. Factory output has slumped in Asia and Europe as the global recovery falters, leaving emerging markets facing the twin threats of elevated price gains and slowing economic growth. India’s inflation has exceeded 9% for eight straight months, weathering 11 rate increases since mid-March 2010 even as higher borrowing costs crimp domestic spending. (Bloomberg)