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To: Jim Willie CB who wrote (3618)	3/7/2003 9:12:32 AM
From: 4figureau	Read Replies (1) \| Respond to of 5423

Payrolls Plunged 308,000 in February Friday March 7, 9:00 am ET By Caren Bohan WASHINGTON (Reuters) - The number of workers on U.S. payrolls plunged in February at the sharpest rate since November 2001 and the jobless rate rose to 5.8 percent, the government said on Friday in a shockingly gloomy economic report. ADVERTISEMENT The Labor Department said payroll jobs outside the farm sector declined by 308,000 last month -- in contrast to expectations in a Reuters poll that they would rise by 8,000. Payrolls had risen by 185,000 in January, a number that was revised up from the originally reported 143,000 gain. Some special factors, such as snowstorms, might have been at play in the report, a government statistician said. The jobless rate climbed one-tenth of a percentage point from January's 5.7 percent. The data sent the U.S. dollar spiraling to new four-year lows against the euro. Bond prices surged and stock futures skidded lower. Pierre Ellis, economist with Decision Economics in New York, called the payrolls figure "a catastrophically weak number." "Barring some fluke element to it, which does not seem apparent, the Fed is going to have think very seriously about cutting interest rates," Ellis added. "This kind of job loss translates into potential serious damage to consumer spending. A decline in consumer spending would put the economy into double-dip recession very quickly," he said. WAR JITTERS GROWING The grim report comes amid growing uncertainty about the economy's health at a time when many analysts believe uncertainty stemming from the threat of war with Iraq is leading to reluctance among employers to hire. A Labor Department analyst told Reuters in an interview that special factors such as huge winter storms on the East Coast might have contributed to the February job declines, but he could not quantify the impact. Another factor at play might have been the calling up of military reservists as a potential war with Iraq looms, said Tom Nardone, a Labor Department statistician. Although the consensus forecast of economists had projected a slight rise in payrolls in February, several analysts had been revising their forecasts in recent days to anticipate a possible decline after a raft of downbeat signals, including a spike in applications for jobless claims. February's job losses were widely distributed across industries. Job losses in the retail sector were especially steep, falling 92,000. Manufacturing jobs dropped 53,000 and construction jobs tumbled 48,000. In an unusual development that was at odds with signs of weakness elsewhere in the jobs report, average hourly earnings rose by 0.7 percent to $15.08 after a 0.1 percent drop in January. biz.yahoo.com

To: Jim Willie CB who wrote (3618)	3/7/2003 9:14:35 AM
From: 4figureau	Read Replies (1) \| Respond to of 5423

Dollar Falls to Four-Year Low vs Euro After Bush Speech on Iraq By John Beresford-Peirse London, March 7 (Bloomberg) -- The dollar fell to a four-year low against the euro after President George W. Bush said the U.S. doesn't need United Nations backing to attack Iraq, boosting speculation military action will begin by the end of this month. The dollar dropped to $1.1025 per euro at midday in London from $1.0993 yesterday. It earlier fell as low as $1.1037, its weakest since March 18, 1999, less than three months after the euro was introduced. The dollar has shed more than 20 percent against the euro in the past 12 months. Iraqi leader Saddam Hussein has ``systematically and deliberately'' defied UN mandates, Bush said in Washington late yesterday. The U.S. will seek a vote by the UN Security Council authorizing force to disarm Iraq, although it is prepared to act without the UN's support if it loses that vote, he said. A war may hurt the dollar by weighing on U.S. business and consumer confidence, crimping economic growth. ``Until we see some resolution to the problems in Iraq, the dollar will fall,'' said Pradip Gupta, who manages $200 million in bonds at Nomura Asset Management. Nomura holds less dollars than its benchmarks suggest, and prefers higher-yielding currencies such as Australian and Canadian dollars, he said. The U.S. currency was little changed at 117.21 yen per dollar from 117.22. UN Chief weapons inspector Hans Blix and Mohamed Elbaradei, director of the International Atomic Energy Agency, will report to the Security Council in a public meeting scheduled to begin at 3 p.m. London time. Foreign ministers from 12 of the 15 council members, including U.S. Secretary of State Colin Powell, probably will attend and discuss the report. `Inevitability' An attack without the support of its allies would be the worst scenario for the dollar, because the U.S. would be saddled with most of the costs of a war and its aftermath, analysts say. Investors have accepted ``the inevitability of war,'' said Kamal Sharma, a currency strategist at Commerzbank AG. The dollar may fall to $1.12 as a ``knee-jerk'' reaction when an attack begins, he said. On Jan. 17, 1991, the day a U.S.-led coalition launched an air attack on Iraq to start the Gulf War, the dollar had one of its worst days in the past 12 years. It fell 2.9 percent against the yen, more than on all but eight days since, and shed another 4 percent within three weeks. The dollar also shed 2 percent against the German mark that day, and lost another 4.5 percent in the following three weeks. Against a basket of its main trading partners, the U.S. currency has dropped 16 percent in the past year. It may fall another 10 percent over the next 12 months as the U.S. finds it difficult to attract enough foreign capital to offset its current account deficit, said Nomura's Gupta. Pound The British pound weakened to 68.65 pence per euro from 68.55 yesterday. It has dropped more than 5 percent this year partly because the U.K.'s support for a U.S.-led attack against Iraq makes the pound less of a haven investment, analysts said. The Swiss franc, traditionally seen as a safe investment in times of crisis, strengthened to 1.3291 francs per dollar from 1.3316, extending its gain this year to 4 percent. Bush's comments suggest ``war is going to happen sooner rather than later,'' said Toru Umemoto, a currency strategist at Morgan Stanley in Tokyo. ``We're going to see further declines in the dollar. The euro could get to $1.12 in the coming weeks.'' The dollar may come under further pressure on expectations a report due at 1:30 p.m. London time will show U.S. unemployment rose in February, analysts said. The jobless rate probably climbed a 10th of a percentage point to 5.8 percent last month, edging toward an eight-year high of 6 percent reached in December, according to economists polled by Bloomberg News. Forecasters estimate companies added no more than 10,000 workers to payrolls following a 143,000 increase in January, the survey showed. Japan Any decline in the dollar against the yen may be limited by concern Japan will sell its currency after a 10 percent gain during the past year. A strengthening yen erodes the profit Japan's exporters earn on overseas sales. Japan ``is taking into consideration the movements of both the euro and the dollar,'' Finance Minister Masajuro Shiokawa said. His deputy, Zembei Mizoguchi, said Japan ``will take appropriate steps to stem fluctuations.'' The Bank of Japan sold about 1.2 trillion yen ($10.2 billion) in January and February to keep the currency from strengthening. Japan may look to sell yen again if it strengthens to 116.85 per dollar, said Sharma at Commerzbank. It reached 116.84 on Feb. 27, its strongest since last August. quote.bloomberg.com

To: Jim Willie CB who wrote (3618)	3/7/2003 9:17:00 AM
From: 4figureau	Read Replies (4) \| Respond to of 5423

Japanese shares hit 20-year low No cheer for Japanese investors Japan's leading stock market index, the Nikkei, has fallen to its lowest level since March 1983. The Nikkei fell 2.7% to 8,144 points after a combination of scandal allegations and war fears sparked a widespread sell-off. A war with Iraq appeared to be closer after US President George W Bush said the US would call for a vote on a second United Nations resolution on disarming Iraq, whatever the level of support in the Security Council. There were also growing fears over political tension in Asia after reports that Pyongyang was preparing to test a mid-range missile. Japan's ailing stock market has been hovering close to 20-year lows for some time as the state of the economy and a wave of bankruptcies have undermined investor confidence. Last month Japan's economy minister called on his cabinet colleagues, including the Prime Minister, to start buying shares in an attempt to prop up the market. Scandal The renewed war fears coincided with reports that Nikko Salomon Smith Barney was to be fined for share price manipulation. The reports sent stocks in the brokerage, partly owned by US Citigroup, down by 12%. Japan's Securities and Exchange Surveillance Commission said on Friday the brokerage should be punished for manipulating share prices linked to exchange-traded funds. Other financial institutions were also dragged lower by the reports, and by the arrest of a member of the liberal democratic party for allegedly covering up corporate donations for political fundraising. "One of the most detested by foreign investors is a series of scandals - with the latest one just appearing recently - that could cause political instability before the election season starts," said Koji Muneoka of HSBC Securities. news.bbc.co.uk