Business Pivot Point

The US congress have approved a bill of $17.6 million to create job vacancies. The bill is passed to the President for approval. The features of the bill are the following

Employers would be exempted from social security payroll taxes on the new hirers who were unemployed

Fund highways and transit programs through 2010

Business would be allowed tax break extension for more capital investment such as equipment purchases

This comes after the unemployment rate has not declined in the recent years. The President and his administration has vowed to take measure to accelerate job creation. The US congress did not approve the bill easily. They debated the bill and finally had to approve them. The deadline to apply for extended unemployment benefits is getting closer. The house has to consider roughly $140 million to extend the deadline to the year end.

The building promoters index declined again in March in US. This is an indication that the housing industry is yet to regain momentum from its backfall during recession. Though the US government had introduced enough programs to safeguard the industry and building the confidence of the customers, the reforms are yet to see results.

Obama’s administration had introduced tax credit for buyers of new homes and also extended it to buyers of old homes too. But that evoked little response. Record number of foreclosures have been major contributor to the decline in sales of new houses. Lesser job growth and lower confidence of people and withdrawal of facilities of Federal Reserve have also contributed to the downfall.

The sales of new houses fell to the lowest in January and so did the sales of already owned houses. Unless and until the unemployment issues solves in US, the other industries will have a great impact on them.

A new bill to tighten regulation of US banks is due to be unveiled on Monday, but it is unclear if it will succeed in gaining Senate support.

The legislation is being presented by Democratic Senator Christopher Dodd, chairman of the Senate Banking Committee.

He is moving ahead with the bill despite Republicans on the committee withdrawing their backing last week.

Mr Dodd needs some Republican support to get the bill through the Senate.

This is because - following the Republicans victory in the Massachusetts Senate election in January - the Democrats no longer have the 60-seat majority required to defeat blocking.

US retail sales showed a surprise rise in February as consumers braved extreme bad weather to get to the shops.

The US Commerce Department said retail sales rose 0.3% last month, whereas forecasts had predicted a fall of 0.2%.

The rise, the biggest since November, fuelled hopes that economic recovery is gaining momentum and helped to boost shares on Wall Street.

Parts of America were hit by major snow storms in February, sparking concerns that consumers would remain at home.

The overall gain in sales was held back by a 2% fall in car sales, reflecting in part the recall problems at Toyota.

China’s demand for oil jumped by an “astonishing” 28% in January compared with the same month a year earlier, the International Energy Agency (IEA) says. The body added that demand for oil in 2010 would be underpinned by rising demand from emerging markets, with half of all growth coming from Asia. But the IEA predicted demand in developed countries would fall by 0.3%.

The IEA has increased its global oil demand forecast for 2010 by 1.8% to 86.6 million barrels a day. Oil prices were above $83 a barrel earlier today, the highest in two months, but dropped back to closer to $80 in late afternoon trading.

But, all this development taking the oil prices up is definitely a cause for concern.

The governor of central bank of China indicated the government will detach the China’s currency soon. The information was announced on Saturday. The value of china currency will be reduced from that of the American dollar. The statement of prime minister Wen Jiabao said that that the exchange rates are stable as of now. The idea of many economist and leaders is that China’s exports are increased by the artificial renminbi.

Zhou Xiaochuan the central bank head felt China has to be very cautious in revaluing the renminbi. The reason is due to the growth of major countries is slow. The currency of china was called as a special foreign exchange mechanism which is made to respond to the crisis of the financial world. The timing should be very discreet as the mechanism will be sooner or later abandoned the head said. Until late 2008 the renminbi saw a slow appreciation against dollar.

The price advantage of Chinese manufactured exports was maintained by the government of Beijing. Chinese economy was kept in track with the help of currency stabilization and largest stimulus program. The exports of china are recovering and a boost is seen so the western governments are pressuring the Beijing government to raise the Yuan. The Zhou said duration of two to three years will see the recovery of the global exports.

The last quarter of 2009 saw Britain moving back from recession. The next two years the relapse of the British economy may continue. The British government is facing the high risk of relapse the British chambers of commerce announced. The growth will be seen but will be a below average growth the BCC announced. The economic outlook of UK will be uncertain for certain time. The news was announced in the group’s latest economic forecast by BCC.

The relapse is very high and recovery is very fragile. The economy will see a growth of 1% for 2010 and the expansion of 2011 will be 2.1%. The economy has seen a shrink of 5% in the year 2009. The medium term recovery will be better and some obstacles are seen still. The next two years recovery will be modest and below the historical average BCC added. The fourth quarter of 2009 Britain had escaped from the waves of recession and a growth of 0.3% was seen.

The deep recession during the months of January to October 2009 is the longest in the country. The technical end of recession however happened but the complacency is dangerous. The director of BCC David Frost announced it on last Sunday. To maintain the recovery it is the vital role to be played by the government in wealth creation. A business lead recovery should be planned in the coming budget.

The time of recession is almost over and the economy in US is slowly recovering. The recession had seen many companies toppling down. Downsizing the employee force was seen as a measure of austerity and existence. Many people in US became jobless. Companies world over, had taken to reducing their operational cost as well. It would be apt to say minimizing rather than optimizing of operational cost.

People started finding ways to cut cost . That included reduction of stationary cost as well. When there is mention of stationary cost, then the cost of printers, their accessories and maintenance is not left behind. Companies started looking for low cost cartridges and cheap ink for their printers. They comprised their quality of printing and much to say, they minimized the usage of printer as well. Reports were circulated electronically via mail or a common interface. Resumes were scrutinized online.

There were cut downs on perks for employees, their yearly celebrations and privileges were cut down. The salaries of the existing employees were cut down into half. Now, the situation has lot improved. The companies started hiring more employees. But the other austerity measure remain the same. The companies want to keep the operational cost low , whether there is recession or not.

The oil prices have rose to $82 a barrel becoming the highest in the eight weeks, this Monday. US Crude were up by 59 cents and Brent crude were up by 65 cents a barrel. The New York crude rose more than 1 percent owing to the report that number of unemployed has decreased in February . The dollor value went down 0.2 percent facilitating other countries to get the oil cheaper. The Euro gained value. The gain in euro would help the Greece who is deep down in debt crisis. Greece was promised help from France and other euro zone countries, confirmed by the President of France.

The European Union Commission are discussing the options of launching a monetary fund in likeness to the International Monetary Fund to regulate the economic governance of the EU countries. The EU also said that it was considering a new rescue proposal to prevent the European countries to be affected by the financial crisis, like the one in Greece.

The top executives of EU said that the idea of framing a monetary fund for EU countries were put forth by President of Germany and they are in open discussions of the same right now. They are analyzing both favorable and against setting up of the monetary fu