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8/20/06

Guardian Unlimited Business: Balance of power ebbs away from the US - by Ashley Seager

For the complete report in the Guardian Unlimited Business click on this link

Balance of power ebbs away from the US - by Ashley Seager

The recent flow of news from around the world suggests that the balance of world economic power may finally be swinging away from the United States - the powerhouse of the past decade or more - towards Japan and Europe, which have lagged behind for many years.

Indeed, the US economy has already slowed, expanding at an annual pace of only 2.5% in the second quarter. With news this week that the 12-member eurozone expanded at an annualised rate of 3.6% in the April to June period, Europe is suddenly growing faster than the US. Britain, too, has recovered from last year's slowdown and expanded at an annualised 3.2% in the second quarter.Figures out this week showed employment growth has also picked up in Europe and is now outpacing that of the US, which has slowed down. About 200,000 jobs a month are being created, about four times the amount through most of last year. French job growth is running at its fastest for five years.

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