December 6, 2011
Dees Stribling, Contributing Editor
Looking to shore up the wobbly euro, French President Nicolas Sarkozy and German Chancellor Angela Merkel had a lunchtime meeting on Monday and afterward told the rest of the euro-zone governments — 15 other countries in all, besides Germany and France — that it was time to accept more centralized control of fiscal policy, or else, though the wording was a little more diplomatic than “or else.” By centralized control, the leaders meant changes to the way the euro-zone handles national debt by putting limits on it in national constitutions and imposing automatic penalties for exceeding those limits. Such restrictions would mean making a major treaty change for the EU, and if not enough countries go along, new agreements outside the EU treaties might be cooked up to centralize fiscal policy.
Another treaty change that the two proposed – demanded, essentially — is that decisions made by the European Stability Mechanism, which is the euro-zone bailout fund, be made by a “qualified majority” rather than a unanimous vote, as it stands currently. The problem with unanimous consent became all too obvious earlier this year when opposition in Finland nearly derailed funding of the Greek bailout.
Separately, Standard & Poor’s warned that it was considering a mass downgrade of euro-zone countries, even such AAA stalwarts as France and Germany, due to the trouble with the common currency. Such a move would not only be without precedent, but it would also leave very few AAA counties left in the world, such as Australia, Canada, New Zealand and maybe the U.K. and Norway. The United States hasn’t been a AAA country according to S&P since this summer’s debt-ceiling fracas — but then again, places such as Japan or China don’t have that rating either.
Conference Board Employment Index Ekes Out Gain
The Conference Board Employment Trends Index increased in November to 103.7, up from the revised figure of 102.42 in October. The November figure is up 6.4 percent from the same month a year ago.
Positive contributions from seven out of the eight components drove the index’s strength in November. The improving indicators included Initial Claims for Unemployment Insurance; Percentage of Firms With Positions Not Able to Fill Right Now; Number of Employees Hired by the Temporary-Help Industry; Part-Time Workers for Economic Reasons; Job Openings; and Real Manufacturing and Trade Sales.
“The better-than-expected growth in economic activity in recent months is likely to lead to some acceleration in job growth in the beginning of 2012,” Gad Levanon, director of macroeconomic research at the Conference Board, noted optimistically in a statement. However, he added pessimistically that “this improvement may be short lived, in particular as the U.S. economy slows down once again in the coming quarters.”
Online Shopping Sets New Records
According to comScore, which tracks online commerce, U.S. online spending for the first 32 days of the November-December 2011 holiday season — Nov. 1 to Dec. 2 — totaled $18.7 billion, marking a 15 percent increase versus the corresponding days last year. The week after Thanksgiving saw three individual days eclipse $1 billion in spending, led by Cyber Monday, which became the heaviest online spending day on record at $1.25 billion. The next two days were billion-dollar days for online sales as well.
The company posited that no-extra-charge shipping was a major encouragement in getting those on-line shopping carts full. The week of Thanksgiving (ending Nov. 27) saw free shipping occur on 64.4 percent of transactions, while Cyber Week has maintained a similar level at 63.2 percent, according to comScore.
Wall Street had a moderately good day on Monday, with the Dow Jones Industrial Average gaining considerable ground in the morning and then losing a lot of it in the afternoon after news about the possible S&P downgrade. But still the index finished 78.41 points positive, or up 0.65 percent. The S&P 500 gained 1.03 percent and the Nasdaq advanced 1.1 percent.