U.K.'s PMI Improves In November, While The Rising Unemployment In Spain Remains The Major Threat

Daily Forex Fundamentals | Written by ecPulse.com | Dec 02 09 10:05 GMT |

After the drop in PMI manufacturing data released the previous day showing a decline, today the U.K. released its PMI construction for November showing progress in November. The indicator after rising to 18-month high in August, it fell for two consecutive months in September and October. Today's data showed that the building sector inclined to 47.0 compared with the previous 46.2 and the forecasted reading of 46.9. In October, construction dropped to 46.2 from 46.7 in September. Construction which was responsible for growth in the period preceding the global downfall, despite its surge today, is still impacted by the recession as figures are still below the 50 barrier showing contraction compared with manufacturing and services. PMI services for November will be released this week also which will give a complete picture about whole sectors of the economy. Moreover, MPC members will meet in December to set the interest rate and determine the quantity of the asset purchase facility program. Currently, the rate is at 0.5% and the APF is 200 billion pounds. Expectations are referring that there will not be further expansion to the program as a preparation to withdrawing stimulus later on. The viability of the program has been questioned recently, especially as it did not succeed in jolting the economy out of recession. World economies will embark a new monetary strategy in the coming period as they will shift toward more contractionary monetary policies by stalling stimulus plans and raising interest rate gradually. In other European economies, Spain released its unemployment monthly NET ('000s) for November coming in at -272 million from the prior -240 million. The escalating jobless rate in the euro zone's growth catalyst is underscoring concerns with regard recovery. Currently, the percentage of unemployment is 19.3, accounting for half of the region's rise in jobless rate in the previous year. Perhaps the rising figures are stemming from the fall of the housing sector which was responsible for the high growth witnessed in Spain before the global collapse. The sector shed near 1 million jobs, driving the rate of job seekers to reach the highest in the euro zone. At the time where Germany and France signaled growth in the second and third quarters, Spain is still mired in recession. In response, the Spanish government is increasing spending on infrastructure to boost the economy and generate more jobs. The government will spend 8 billion euros till the end of the year, but at the same moment the jobless benefits are rising, though putting more pressure on the budget deficit which is estimated to reach 9.5% of GDP in 2009 and 8.1% in 2010. Ecpulse disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers' opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk