Paulson calls for new bank rules
Treasury Sec'y Henry Paulson called for a new regulatory system to facilitate the orderly failure of a large, complex financial institution without threatening the entire system. He added that high oil prices and falling home and stock prices will prolong the U.S. slowdown but strong growth in emerging markets will still buoy the global economy.
High energy and food prices haven't boosted core inflation or fueled demands for higher wages that could cause a wage-price spiral, said Fed Gov. Frederic Mishkin. Europe producer prices jump
Wholesale prices in the 15-member euro zone rose 1.2% in May from April on soaring energy costs, the EU statistics office said. Prices were up 7.1% from last year. The European Central Bank is expected to raise interest rates Thu. to curb inflation.
Inflation will "explode" if the ECB doesn't act decisively, ECB head Jean-Claude Trichet told German weekly Die Zeit. Euro zone inflation hit a record 4% in June. OECD sees unemployment rising
Average jobless rates in industrialized countries will rise to 5.7% this year and 6% in '09 as financial market turmoil hits economic growth, said the 30-member Organization for Economic Cooperation and Development. "The declining trend in unemployment in recent years is projected to reverse in 2008," it said, with the U.S. especially hard hit.
U.K. building activity plunges
The Chartered Institute of Purchasing and Supply's construction index fell to 38.8 in June from 43.9, the fourth straight drop and the biggest since the survey began 11 years ago. The housing sub-index also fell 5.1 points to a record low of 25.6. Figures below 50 signify contraction. Meanwhile, falling home prices reduced the amount of equity that Britons could borrow against in Q1, Bank of England data showed.
COMING UP THURSDAY
Nonfarm payrolls for June, 8:30 a.m. EDT (forecast: -60,000; unemployment rate: 5.4%; hourly earnings: up 0.3%). Initial jobless claims for the week ended June 28, 8:30 a.m. EDT (forecast: 385,000). ISM services index for June, 10 a.m. EDT (forecast: 51).
Related posts: