Thursday, December 4, 2008

New US export: unemployment

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The Independent Thursday, 04 December 2008

New US export: unemployment

The Independent Thursday, 04 December 2008

The United States once exported jobs. Now, it is exporting unemployment.

America's deepening recession, which has cost 1.2 million jobs so far this year, is taking a heavy toll worldwide. Shrinking consumer demand for imports and less need for outsourcing by US companies are leading to job cuts at Germany's Porsche and at Chinese businesses that make toys for Mattel.

Economists say worldwide unemployment may increase to a two-decade high as trade and investment ties that have developed during 20 years of globalisation magnify the impact of the US contraction.
Without buoyant economies elsewhere in the world to act as buffers, a longer, deeper slump in the labour market is likely.

In the same way it was supporting economic activity when it was growing rapidly, the recession in the US is going to be a drag on the global economy and is going to reduce employment in US trading partners, says Lewis Alexander, chief economist at Citigroup in New York.

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