US economic Meltdown: News getting worse - by Steven Mufson and Neil Irwin
A soaring jobless rate, an unprecedented jump in oil prices and a sliding dollar cast fresh doubt Friday on how soon the U.S. economy would be able to break out of a pattern of feeble growth and financial instability. The unemployment rate shot skyward to 5.5 percent, the biggest leap in 22 years, and crude oil prices rocketed up $10.75 a barrel, sending stock markets tumbling and shaking the economic and political landscape.
An almost forgotten element of Friday's chaos was the U.S. dollar's continuing slump. Europe's central bank president, Jean-Claude Trichet, started the two-day surge in oil prices Thursday when he suggested that he might increase interest rates. That strengthened the euro, Europe's currency, against the dollar. Because oil is priced in dollars on world markets, a weaker dollar incites sellers to require higher prices.
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