WASHINGTON – Finance ministers and central bankers from the Group of Seven leading industrial nations are heading to Washington for their first meeting since the terrorist attacks, in an effort to restore confidence and calm jittery global markets.
The two-day Group of Seven meeting starts Saturday.
At a news conference ahead of the meeting, U.S. Treasury Secretary Paul O’Neill said the recent attacks were a shock to the economy and have delayed any recovery by a quarter or so. But he added he remains confident the U.S. economy will excel in the long term, and he urged other industrialized nations to take steps to raise their growth rates.
Earlier in the day, The U.S. Labor Department reported the U.S. unemployment rate stayed at four-point-nine percent in September — eventhough businesses cut 199-thousand jobs from the economy.
It was the biggest loss of jobs for a one-month period since February of 1991, when the United States was in recession, which is defined as two consecutive quarters during which the economy shrinks. Analysts say what’s worse is that the latest report doesn’t fully reflect job losses after the September 11th terrorist attacks, and add that job cuts and the unemployment rate may go higher in the months ahead.
Weakening global economies has resulted in less demand for oil and lower oil prices. OPEC Secretary General Ali Rodriguez told reporters Friday in Vienna the oil cartel may decide to cut production next week to prop up slumping prices. He said OPEC will not wait for a U.S. military response to last month’s terrorist attacks to make a decision on oil production. On Friday Internet giant Sun Microsystems, which makes equipment that runs corporate computer networks, said it would cut nine percent of its workforce, or about 3,900 jobs, amid an uncertain outlook for profits after the terrorist attacks. Job losses across the United States were mounting even before the attacks, and worsened as aircraft were grounded and consumer spending declined.
While the U.S. Federal Reserve has cut its key interest rate several times this year in an effort to avoid a recession and stimulate growth in the world’s largest economy, many economists think the nation may go into a recession. The United States is not alone in its economic weakness; European growth is weak and Japan – the world’s second-largest economy – is flirting with its fourth recession in the past decade.
Some information for this report provided by Bloomberg.
