FED CONCERN AT SLUGGISH US ECONOMIC GROWTH - The US Federal Reserve left interest rates steady and made no change to monetary policy after its one-day meeting last night. But the Fed expressed greater concern than before about the sluggish pace of economic growth and low inflation. This assessment comes the same week as figures from the US National Bureau of Economic Research said the US economy emerged from recession in June last year after an 18-month downturn.
Dermot O'Leary, economist at Goodbody Stockbrokers, says that while the US has managed to avoid a double dip recession, the US Fed acknowledges that economic growth is weaker than it had hoped and inflation lower than it would have liked. He says the Fed left the door open for 'QE2' last night - a second programme of quantitative easing which would effectively see it printing more money. He says the prospect of this is making the dollar weaker.
On the Irish economy, Mr O'Leary says the quarterly national household survey continued some interesting insights yesterday into the jobless situation. He says it reveals an unemployment crisis in the younger age group with 26% of 20 to 24 year olds are jobless. The CSO said yesterday that the big outflow of Irish migrants is made up of young people and says the country needs some scheme to encourage employers to take young people on. He says that up to this the Government has been 'fire-fighting' on the unemployment problem as it deals with the banking crisis and deficit problems. The economist says that the Government's next focus should be on jobs creation.
Mr O'Leary predicts that the banking sector will see more job losses as the consolidation process continues, while the public sector job numbers will also suffer. However, as the real economy picks up, he says that job prospects in the hotel and retail sectors should improve.
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MORNING BRIEFS - Engineers Ireland says the food and forestry sectors in Ireland are underused and offer great potential to boost exports. The organisation, which is run by a former head of Coillte, Martin Lowery, says natural resources offer the best prospects for an internationally competitive indigenous industry. And it says tree growing especially is one of the few areas in which Ireland has inherent competitive advantage because of the climate.
*** After official figures yesterday showed that the number of people at work in the economy continued to fall in the second three months of this year, recruiter Premier's Irish Employment Monitor shows that August 2010 saw the number of new professional jobs coming to the market in Ireland increase by 46% compared to August last year.
*** A report from the Institute of Certified Public Accountants on entrepreneurship has called for the development of a National Entrepreneurship Strategy by Government in consultation with the business community. It also wants equal tax and social welfare treatment for self-employed people and a new tax incentive to allow private investors to write off investment losses in start-up enterprises against income tax.
*** Origin Enterprises, the company that owns some of the biggest household brands like Batchelors, Shamrock and Roma in food and Maastock in veterinary products, reported its annual results today. Origin says the outlook for farm incomes has resulted in a return to more normal demand patterns across agri-services, while the trading environment in food remains challenging.
*** On the currency markets the euro is trading at $1.3320 cents and 84.86 pence sterling.
