US economy: chronology of recovery

January 2009:They throw a 1.1 m jobs in the last two months of 2008, the figures show, making it the worst year for the market since the second world war.

The unemployment rate hit 7 2pc in December 2008, its highest since 1993.

March 2009:With the American economy shrank again, unemployment reached 8 5pc, the highest level since 1983.

August 2009:In August, the unemployment rate rose to 9 7pc.

September 2009:The u.s. unemployment rate hit 9 8pc in September, its highest level in 26 years.

October 2009 - the u.s. economy out of recession in the third quarter of 2009, figures published in the October show in 3 5pc.

However unemployment was mounted from July to September period, and without a job for October figures show the unemployment rate rose to 10 2pc.

January 2010 - the u.s. economy grew at the fastest pace for over six years in the last quarter of 2009, display numbers, expansion by 5 7pc-on-year. However, for 2009 in its overall economy was reduced by 2 4pc, its worst year since just after the second world war.

February 2010: figures for January show unemployment rates decreased again under 10pc.

July 2010: in July, the unemployment rate did not dropped much more, sat at 9 5pc. However the economy developed by 1. 7pc in the second quarter from April to June.

November 2010: the US economy grew by 2 5pc in the third quarter, revised figures show, purchases of consumption increased at the fastest pace since the last three months of 2006.

More people found work in October, the unemployment rate decreased to 9 6pc.

December 2010: American unemployment in November climbed unexpectedly at its highest level since April as slaughter in jobs of the retail given the rate of unemployment mounted for the first time in three months, hitting 9 8pc.

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Us unemployment jumps unexpected what prompted fears of 9 8pc recovery

Retail employment decreased from 28,000 in November, including waterfalls in the Department store employees by 9,000 jobs. Photo: REUTERS

Us unemployment is now 9 8pc, more than 9 6pc last month. Employment growth slowed to 39,000 November — far of the 130 000 provided by the experts - after an average increase of 86 000 per month since December 2009.

In London, the FTSE 100 index fell 1pc 5,720 news and the Dow Jones Industrial Average down 0 3pc on open 11,331.42 as investors fear for the future of the recovery in the United States. Flight safety or seen jumping over $ 1,400 an ounce on the back of the news.

Economists said the unemployment figures demonstrating the fragility of the recovery in the United States would be considered by the US Federal Reserve as validation of its decision the month last $600bn more in the economy of the pump.

"The labour market is not turning around, and it is the key to the overall recovery" David Semmens, an American economist at Standard Chartered Bank in New York, told Bloomberg. "Anyone who believes that the Fed was perhaps too prematurely is definitely would have to eat their words".

Retail employment decreased from 28,000 in November, including falls in the store used by 9 000 jobs and furnishings furniture and home stores by 5,000.

Health care industry was the big winner in November, with a gain of 19,000 for months, even if it was still lower than the average increase of 21,000 known so far this year.

This year has also seen an increase in apathy among many unemployed, with the number of workers do not look for work because they feel that without a job for them at 1.3 million coming are 861,000 a year earlier.

Drew Matus, a senior economist at UBS, stated: "The United States may have to face the fact that unemployment will be high for an extended period."

"There are people who need to be recycled for new jobs and will take time."

The Organization of cooperation and development (OECD) had warned in September that the long-term unemployment may be a reality for many Americans.

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Twin threats of Japan and Gulf stalk global recovery

We are discovering once again that the country is the world's top creditor by far with nearly £2 trillion of net assets overseas.

The risk is doubly dangerous when combined with the fast-escalating conflict in the Persian Gulf, where Saudi Arabia's use of troops to suppress Shi'ite dissent in Bahrain risks a showdown with Iran.

"People had thought global recovery was self-sustaining and now equity markets are starting to ask whether it might be snuffed out," said David Bloom, currency chief at HSBC.

The twin crises come as fiscal tightening in the West and credit tightening in China start to bite. US economists such as Larry Summers and Paul Krugman fear recovery has not yet reached "escape velocity", leaving it vulnerable to external shocks.

"I am afraid we are near tipping point on global recovery," said Simon Derrick from BNY Mellon. "The fact has oil has not risen despite the latest events in the Mid-East tells you a lot about growth in the second half of this year. All the inflation talk may fade away as in 2008."

HSBC said the pattern after the 1987 crash, the 1998 Asia crisis, and Lehman's collapse, was that Japanese repatriation kicked in violently with a lag of a week. The impact may be greater this time given the trauma, and power-rationing as 11 nuclear reactors are shut down.

"This overseas wealth is like a crisis fund: this is what it is for," said Mr Bloom.

The sudden snap back in capital flows vastly outweighs the global impact of lost output, though that too is significant given plant closures by Toyota and others.

HSBC said appetite for "Uridashi" bonds of countries such as Brazil, South Africa, and Australia has "collapsed", cutting off a key source of fresh funding. The bigger effect is liquidation of global assets built up during the "carry trade", when Japan's insurers, funds and famed housewives ("Mrs Watanabe") fled zero rates to chase yield abroad. These assets include UK equities, US municipal bonds and commodity funds.

This is why an earthquake in a region covering 6pc of Japan's economy – or less than 0.5pc of global output – has set off a global rout.

Other dangers abound. CreditSights said Japan's three top banks hold $1 trillion (£62bn) of local equities. These holdings are underwater once the Topix index falls much below 800, hence the worries over the 16pc drop to 767 over the past two days.

The Bank of Japan keeps a close eye on equities and the yen. It has intervened with 21 trillion yen (£168bn) of liquidity and doubled bond purchases to 10 trillion yen to boost confidence.

Hans Redeker from BNP Paribas said the "pressure point" is the $3.9 trillion portfolio of government bonds held by the banks. The fiscal strain of the earthquake comes at time when tax revenue already covers less than half the budget, public debt is 225pc of GDP, and pension funds are becoming net sellers of bonds to meet payouts to the elderly.

The Bank of Japan may have to print money lavishly if the "deflationary equilibrium" of recent years breaks down, but this risks loss of confidence in Japan's $12 trillion debt stock, worth a fifth of global GDP. The central bank must walk a tightrope.

Meanwhile, events in Bahrain at the epicentre of global crude supplies are potentially just as threatening. Shi'ite protesters have denounced the arrival of Saudi forces to prop up Bahrain's Sunni king as an "act of war". What began a month ago as a civic rally for greater freedoms has evolved into a sectarian uprising by the Shia, 70pc of the island and with mixed Arab-Iranian ancestry. Iran called the Saudi move "unnacceptable", and left doubt that a bloody crackdown will prompt a response.

The risk group Exclusive Analysis said it expects "use of heavy force against protesters" as Sunni-Shia fighting breaks out, which in turn may cause Iran to "activate proxy militia to carry out attacks on security forces".

This would create a state of latent warfare between the two Gulf superpowers, and risk setting off a Shia uprising in Saudi Arabia's eastern province, home to giant Ghawar oil field.

David Murrin from Emergent said events had become unstoppable. "You can't put this explosive Shia energy back in a box. Nor can the Saudis try to pay them off because that won't change their ideology. There is a revolution under way in a region that underpins the US economy and the dollar," he said. Markets live: follow the effects of the Japanese disaster on the global economy.

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