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New York, NY, United States (AHN) – More job cuts are ahead for workers in the United States, according to the latest jobs report by outplacement consulting firm Challenger, Gray & Christmas.

Challenger says the number of jobs employers plan to cut increased by 11.6 percent in June to 41,432, up from 37,135 in May. Government workers will be hardest hit.

This is the second consecutive month of increased job cuts after the number fell to a four-month low of 36,490 in April.

“The employment picture remains a bit cloudy. Continued slowness in the pace of job cuts is certainly promising. However, hiring is coming in spurts and is not quite robust enough to make a significant dent in unemployment,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“We saw relatively strong payroll gains in February, March and April, only to see much slower growth in May. The next three or four months of employment and hiring data will be important indicators of whether the expansion has prematurely hit the brakes or if the dips in job creation are simply bumps on the road to recovery,” he added.

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Charlotte, NC, United States (AHN) – Bank of America on Wednesday announced it has agreed to pay $8.5 billion to settle a dispute with investors who lost money on mortgage-backed securities.

It is the largest settlement ever for a mortgage lender and ends a nine-month battle between the bank and 22 investors who held a combined total of more than $56 billion in mortgage-backed securities in the 2008 financial crisis after the housing market bubble burst.

Among the 22 investors were Prudential Financial Inc., MetLife and the Federal Reserve Bank of New York.

The investors bought the mortgage-backed securities from Countrywide Financial, which Bank of America acquired in 2008.

Investors allege that the securities were packed with bad mortgages, which was contrary to the information the investors were given about the quality of the debt and the collateral backing it, which they were purchasing. Moreover, the investors alleged that Countrywide and Bank of America failed to keep accurate records of the loans.

Company officials say the company will post a second-quarter net loss of around $9.1 billion, or 93 cents per share, because of the payment.

A court must approve the payout before it is made.

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Ottawa, Ontario, Canada (AHN) – In a rare Sunday session, the Canadian Senate approved back-to-work legislation for striking Canada Post employees.

The passing of the measure would result in the resumption of regular mail service throughout Canada, ending the one-month old strike by mail carriers and other postal employees belonging to the Canadian Union of Postal Workers.

Governor General David Lloyd Johnston is expected to give royal assent to the Senate approval, which would force about 50,000 Canada Post workers to resume their duties by Tuesday or 24 hours after the governor general gives his assent.

Before the senate approval, the House of Commons passed Bill C-6 on Saturday night after 50 hours of continuous debate. The bill, introduced by Labor Minister Lisa Raitt, was approved without changes.

The CUPW assured the Senate that the postal workers would obey the legislation and return to their jobs.

The legislation would end 12 days of rotating strikes held by the CUPW. The job walk off affected Canada Post offices in major Canadian cities, leading the government agency to reduce mail delivery services to just thrice a week.

Despite the strike and lock out, the postal employees fulfilled their promise to deliver unemployment and social security checks to Canadians.

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Trollhattan, Sweden (AHN) – A little over a week after announcing an agreement with two Chinese investors to help with its liquidity, troubles continued for Saab on Thursday after unions threatened court action over unpaid wages.

In a statement on Thursday, Spyker Cars, which this month changed its name to Swedish Automobile, said it will be unable to pay the salaries of employees because it had yet to secure short-term financing.

The beleaguered carmaker said it is in discussions with different groups about immediate sources of cash, including the sale and lease-back of Saab properties, and possible arrangements with current investors.

“There can however be no assurance that these discussions will be successful or that the necessary funding will be obtained,” Swedish Automobile said.

In response, IF Metall and Unionen plans to send a demand notice to Saab and give the company a week to pay outstanding wages. The two unions called on the Swedish government as early as 2009 to intervene to save the iconic brand as well as workers and subcontractors in the Swedish car industry that depend on the company.

IF Metall Federal Chairman Stefan Löfven said in a statement the announcement about wages “was the worst possible news” but that unions are “working hard to come to a solution.”

“We still believe in Saab,” Löfven said.

Swedish Automobile announced on June 13 investments from two Chinese firms that will help it resume production at its Saab plant in Trollhattan, Sweden.

Pang Da Automobile and Zhejiang Youngman Lotus have agreed to invest a total of 245 million euros ($352 million) in Swedish Automobile under an agreement that includes distribution and manufacturing joint ventures in China.

The agreement increases the investment of Pang Da to 109 million euros from 65 million euros while keeping the firm’s equity stake in Spyker at 24 percent. The firm, which is China´s largest publicly traded car distributor, said last month it would buy shares of Swedish Automobile for 4.19 euros each, at the time the weighted average of shares.

The new agreement retains the share price and gives Pang Da the right to nominate two members of the supervisory board of Swedish Automobile.

Youngman, which makes trucks for German-based MAN and cars and spare parts for British-based Lotus, will acquire a 29.9 percent stake of Spyker for 136 million euros.

Swedish Automobile revealed the agreement after it again suspended production in Trollhattan.

A seven-week production halt began in April due to unpaid bills from suppliers. Work at the plant resumed after Pang Da paid 30 million euros to buy Saab vehicles as part of its initial agreement with Swedish Automobile.

In early June, however, Victor Mueller, chief executive of Saab and Spyker, said that although agreements with most suppliers had been reached, there remained a lack of parts from a few remaining suppliers as well as those that were taking some time to re-stock because they are located outside Europe.

Spyker currently has nearly 10,000 orders, including those for the Saab 9-4x, which is being made in Mexico.

In its official corporate blog, Saab’s Swade said on Thursday the pending orders “represent a big boost to Saab’s inward cash flows, however we can’t invoice and receive payment for those cars until they’re built.”

“We can’t invoice a 98 percent complete vehicle’” he added. “You can call it a Saabish chicken-and-egg puzzle if you like – we have plenty of orders to complete… if we can get parts, but parts have been difficult to get because of restricted cashflow. We are working hard with suppliers to resolve this.”

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Washington, D.C., United States (AHN) – The Federal Reserve reduced its forecast for the U.S. economy for 2011 and 2012 on Wednesday. For this year, the Fed estimates that the country’s economy would expand from 2.7 to 2.9 percent only.

It is lower than the U.S. central bank’s April forecast of a 3.1 to 3.3 percent rise in gross domestic product.

Fed Chairman Ben Bernanke attributed the lower outlook for the American economy to the impact of higher prices on consumer spending, weakness in the financial sector and the ongoing decline of the housing market.

But Bernanke added there is no precise explanation for the persistence of slower pace of growth, and admitted some of the head winds that hit the economy apparently are stronger or more persistent than officials thought.

Bernanke also warned that unemployment rate would continue to remain high until the end of 2011.

The Fed, in effect, took back its view that the economic slowdown was only temporary. However, despite the lower economic forecasts, the Fed said it will end by June 30, as scheduled, a program of purchasing large amounts of Treasury bonds and did not indicate if it will pursue new action.

Because of the weaker outlook, the central bank’s Federal Open Market Committee, at its 22nd meeting, voted unanimously to keep key lending rates between 0 to 0.25 percent. The rate has been at that level since December 2008 in a bid to boost the country’s GDP.

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Luxembourg City, Luxembourg (AHN) – European finance ministers delayed on Monday the release of the second tranche of Greece’s bailout until July. After seven hours of discussion, the ministers set as a condition for the release the approval by the Greek Parliament of spending cuts and financial reforms, including a large-scale asset privatization program.

The release of the second part of the Greek loan – part of the $257 billion (110 billion euros) EU and IMF aid package – is expected to be approved by the ministers in their meeting this week at Luxembourg.

Among the measures initiated by the embattled Greek government that would lead to the EU and IMF approval of the loan is the reshuffling by Greek Prime Minister George Papandreou of his cabinet on Friday. Leading the revamp was the appointment of former Defense Minister Evangelos Venizelos as finance minister, replacing George Papaconstantinou.

Venizelos, who arrived for the Luxembourg meeting, pledged Greece’s commitment to the financial assistance program from EU and IMF.

Papandreou admitted that Greece needs a second international bailout of $157 billion, which is as large as last year’s bailout, to avoid a debt default. He appealed on Thursday to the Greek parliament for a vote of confidence as the legislators prepare to cast their crucial ballot on Tuesday.

Despite the indications of a second bailout, British banks wary of a second bailout threatened to pull billions of dollars from the eurozone.

London Mayor Boris Johnson likewise pushed for Britain not to contribute to the second bailout. The mayor said Greece should instead default on its debts and leave the euro. Johnson blames the euro’s recent trouble, caused by large debts of three eurozone members, for worsening the financial crisis. He urged Chancellor George Osborne to stop throwing British taxpayers’ money after bad investments.

Although British ministers are not in favor of financing the new loan to Greece, the coalition could not avoid financial involvement in the Greek bailout because of European finance rules.

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Washington, D.C., United States (AHN) – New unemployment claims remain stubbornly high at 427,000 for the week ending June 4, which were 1,000 more than the previous week.

Economists generally agree that initial claims for unemployment compensation insurance must drop below the 400,000 mark weekly and stay there before there is a recovery in the jobs sector of the United State’s economy. But claims have been stuck above that mark for nine weeks now.

Although the nation officially came out of recession two years ago, so far the economic recovery has been limited to the financial services sector of the economy with the jobs and small business sectors still struggling.

The U.S. only created 54,000 jobs last month, which is well below the 200,000 jobs the economy needs to create monthly just for first time workers. In addition, competition for jobs is stiff. With only 3 million openings nationwide, there are at least 4.6 jobless Americans for every available job.

Moreover, the less volatile four-week moving average for first time jobless claims is still stuck above the 400,000 mark at 424,000, a small decrease of 2,750 from the previous week’s revised average of 426,750, according to the U.S. Department of Labor.

The total number of people claiming benefits in all programs for the week ending May 21, the latest week for which such data is available, fell slightly to 7,601,344, down by 89,233 from the week before.

However, that does not necessarily mean those people found jobs. Jobless benefits limits can end before a person finds work. In addition, that is more likely to happen in the future as many states move to cut the number of weeks a jobless worker can collect unemployment compensation insurance payments.

 

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Dhaka, Bangladesh (AHN) – Bangladesh, the world’s poorest Muslim majority country, unveiled a $22 billion deficit budget high on defense expenditures and low in farm spending. The government projects revenue income at $16.01 billion in the coming fiscal year, up from nearly $13 billion. The budget was placed in Parliament on Thursday amidst a boycott by the main opposition Bangladesh Nationalists Party.

The overall agriculture budget decreased more than 12 percent while defense spending increased almost 29 percent, the largest rise among major sectors. Instead of investing in human development and infrastructure, money will go towards increasing Bangladesh’s military firepower and salaries of defense personnel.

Finance Minister Abul Maal Abdul Muhith has called for higher allocation in the energy and farming sectors to perk up economic growth. In a move to end a serious of power outage, the power production saw an increase of almost 20 percent as the finance minister outlined a plan to increase power generation by almost three times adding 7,800 megawatts to the national grid by 2013.

The minister set a 7.0 percent growth target for the gross domestic product (GDP) starting on July 1.

The budget holds down the rising inflation, principally blamed on price spirals and depreciation of the local currency, he explained.

Economic think-tank Unnayan Onneshan, in a quick assessment on Thursday said the government might face extraordinary challenge to reach the growth target as quoted in the budget document of fiscal 20111-12 due to lack of supporting base in the overall economy of Bangladesh.

The fiscal space squeeze and IMF condition for accessing one billion dollar loan to Bangladesh might also pave the way for increasing different type of inequality; such as geographical inequality, income inequality and social inequality in the country, the think-tank said.

Finance Minister almost echoed with the think-tank and said that the next fiscal year would be challenging for the economy. “Recovery from the recession and political instability pose a great risk for the economy and we’re going to form a taskforce to deal with it,” he told journalist on Friday.

He does not hesitate to blame that the economy has fallen into trouble after recovery from recession due to commodity crisis and in Bangladesh political stability rubs salt to the injuries.

The anti-tobacco lobby expressed mixed reaction, when the government increased tax to 42.5 percent to discourage smoking. The activists were expecting strict economic restrictions of the tobacco growers.

Bank stocks went up Wednesday and Thursday riding largely on report that corporate tax will go down to 40 percent for commercial banks.

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Atlanta, GA, United States (AHN) – U.S. Federal Reserve Chairman Ben Bernanke expressed confidence on Tuesday that the American economy will continue to recover slowly even if recent indicators point to economic weakness.

He said despite oil and other commodities price increases, he sees no evidence of broad and enduring inflation. Bernanke acknowledged that the moderate pace of growth is uneven across sectors and is perceived by unemployed and underemployed workers as frustratingly slow.

Data released by the Labor Department on Friday said that job growth slowed dramatically in May and unemployment rate went up to 9.1 percent.

Bernanke told delegates to an International Monetary Conference in Atlanta that growth would likely pick up in the second semester of 2011 as the negative impact of the Japanese disaster on manufacturing output and gas prices ease.

However, Bernanke said there is little chance that the Fed will go through another round of quantitative easing to expand money supply and boost the American economy. The conclusion of the second round of the Fed’s $600-billion QE this month led to speculations that a third quantitative easing might be on the way.

U.S. President Barack Obama has similarly expressed worry about the slow pace of the American economy’s growth, but he discounted the possibility of another recession.

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Washington, DC, United States (AHN) – Beneficiaries of a $1.25 billion settlement of a discrimination case between the government and black farmers have begun receiving notifications, bringing a decades-old class action lawsuit a step closer to conclusion.

The Agriculture Department settled the historic case, known as Pigford II, in early 2009 but appropriation from Congress was delayed over Republican concerns about fraudulent claims and the costs of the settlements during a recession.

The settlement is the second one reached with black farmers, led by Timothy Pigford, who filed a class-action suit in 1997 alleging racial discrimination in farm loan programs dating back to 1983.

The government paid out $1 billion in 1999 to more than 15,000 farmers in the settlement known as Pigford I. However, about 72,000 missed the filing deadline for claims, leading to another settlement and allegations of fraud from conservatives.

Lawmakers appropriated $100 million for the Pigford II case in 2008 through a farm bill, leaving $1.15 billion that still required approval. Last December, a bill appropriating the remaining amount was signed into law despite GOP opposition.

House Republicans led by Reps. Michelle Bachman (R-MN) and Steve King (R-IA) had sought to withhold funding, citing fraud in the claims process and in spite of assurances from Agriculture Sec. Tom Vilsack that the bill includes protections against abuse.

A December 2010 report from the Congressional Research Service also confirmed arguments by black farmers that the USDA census on farmers in the period covered by the case was inaccurate. According to the report, the census failed to account for farmers who rented farmland and those who were not actually farmers because they tried to farm but were denied loans.

The Pigford II settlement still requires final court approval, which will be handed down during a hearing on Sept. 1. Following the ruling, each claim will be reviewed, making payments unlikely before late 2012.

The filing deadline for claims may be as early as the end of February next year. Beneficiaries who oppose provisions of the settlement may file their objections by Aug. 12.

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