Business | General

US firms cut 473,000 jobs

US private employers cut almost half a million jobs last month and mortgage applications fell to a seven-month low last week, dampening hopes the economy was emerging from its worst slump since the Great Depression.

  • Reuters
  • Published: 22:52 July 1, 2009
  • Gulf News

New York: US private employers cut almost half a million jobs last month and mortgage applications fell to a seven-month low last week, dampening hopes the economy was emerging from its worst slump since the Great Depression.

The news supported other evidence from Europe and Asia that a broad recovery would be slow in coming, as euro zone manufacturing activity contracted in June, with Germany lagging behind other nations, and Japanese business morale disappointed.

The 473,000 private-sector job losses were more than expected, but less the 485,000 jobs lost in May and the smallest number cut in a month since last October.

The Mortgage Bankers Association said its US mortgage applications index fell 18.9 per cent in the week ended June 26 to its lowest level since November, despite slightly lower borrowing costs.

"Rising unemployment, concerns about job security, potential buyers' inability to sell their existing homes and problems with appraisals coming in too low are all weighing on demand," said Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley.

Asian data excluding Japan was more encouraging, with China's manufacturing sector extending a steady if unspectacular recovery in June, and South Korea's exports falling much less than expected from a year earlier.

In Japan, business morale improved less than expected in June, plagued by doubts about the global economy, while US consumer confidence dropped more sharply than expected, suggesting the 18-month recession had not loosened its grip.

In Britain, manufacturing activity fell at its slowest pace in more than a year in June as output rose for the first time in 15 months, a survey showed. Service sector output fell at its slowest pace in six months.

Meanwhile, in Germany, engineering orders fell by 48 per cent in May in real terms from the previous year, the industry association VDMA said yesterday.

However, German retail sales rose unexpectedly by 0.4 per cent month-on-month in May, their third consecutive increase, in a sign that lower inflation rates are encouraging consumers to spend

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