(CEP News)
• U.S. Consumer Sentiment Lowest in 29 Years
• JPMorgan and Citigroup Announce Moratorium on Foreclosures
• Canadian Auto Sales Fall at Fastest Pace in 11 Years

U of M Consumer Sentiment Sinks in February

U.S. consumer sentiment moved lower than expected in February, with two thirds of those surveyed forecasting the economic downturn will last 5 more years. According to a preliminary report from Reuters and the University of Michigan, the headline consumer sentiment index fell to 56.2 from a final reading of 61.2 in January, despite expectations for a decline to a 60.2 level by a survey of economists. Respondents to the survey were nevertheless more positive about the current situation, with that index up to 69.2 from 66.5 the month prior.

“This is likely a function of future trepidation over the job market outlook as well as a lack of a clearly defined financial bailout plan,” said Ian Pollick, economist with TD Securities. “On balance, this report is still hovering near the lows made last year, though ominously it is the future that generates the most pessimism and not the present.”

JPMorgan and Citigroup Announce Moratorium on Foreclosures

Two major U.S. banks have announced they will halt foreclosures, after coming under intense pressure from U.S. politicians on Wednesday to do something to help U.S. citizens weather the financial crisis.

Citigroup announced it will be halting foreclosures starting Feb. 12. The bank will uphold this commitment until U.S. President Barack Obama has finalized the details of his plan to modify mortgage loans to benefit U.S. residents at risk of losing their homes. Minutes later, JPMorgan announced it will also put a moratorium on foreclosures for a three-week period, or until March 6.

Canadian New Vehicle Sales at Lowest Level Since 1998

Sales of new cars in Canada declined 14.8% in December compared to November, with 109,831 vehicles sold by dealers. The decline in sales was slightly less than expected, but still marks the sharpest decline since 1998. Year-over-year, sales are down 22.5%.

November’s 7.0% decline was revised down to a 7.2% contraction. Preliminary data, however, suggests the number of new motor vehicles sold rose by about 6% in January.

FOMC Extends Meetings to Two Days

In an effort to allow additional time for discussion, the U.S. Federal Reserve announced that all meetings of the Federal Open Market Committee in 2009 and 2010 will be extended to two days from one. Consequently, all of the central bank’s monetary policy announcements will be delivered one day later, on Wednesdays rather than Tuesdays.

U.S. Mass Layoffs Reach Record Level in Fourth Quarter

There were 3,140 mass layoffs in the U.S. in the fourth quarter, the highest level on record dating back to 1995, the Department of Labor reported. The mass layoff events resulted in 508,859 people losing their jobs, led by the construction and manufacturing sectors, which both saw record high mass layoffs and separations in the quarter.

Canadian Non-Residential Building Costs Fall in Q4

Non-residential building costs in Canada fell 2.8% in the fourth quarter, reflecting lower material prices and a weakening in the non-residential construction market, Statistics Canada reported. The non-residential building construction price index fell to a reading of 151.2. The benchmark level of the index is 100, set in 2002.

Australian Senate Approves A$42 Billion Fiscal Stimulus Package

An A$42 Billion (US$28 Billion) fiscal stimulus plan cleared the Australian Senate on Friday, setting the stage for the government to fight the first recession the country has seen in 18 years. The legislation comprises A$12.7 billion in payments to low- and middle-income workers and A$28.8 billion in infrastructure projects. The package will also amount to roughly 1.3% of GDP in 2009 and 2.0% of growth in 2010.

By Stephen Huebl, shuebl@economicnews.ca, with contributions from Erik Kevin Franco, efranco@economicnews.ca and Megan Ainscow, mainscow@economicnews.ca

CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca

The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.

A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.

Posted in Categories: Australia, Canada, Economy, Eurozone, Releases, USA.

Subscribe by RSS Subscribe by Email