The United States fell deeper into recession, new data showed yesterday, as the number of people filing for jobless benefits hit a 26-year high last week and consumers cut spending for the fifth consecutive month.
Elsewhere, Japan and Germany became the latest countries to approve new spending programs to jolt their own economies out of recessions brought on by the worsening global credit crisis.
In Tokyo, the government approved an 88.5 trillion yen (£663.3 billion) budget, its biggest ever, to help finance a 12 trillion yen fiscal stimulus program.
Germany announced plans for a second stimulus package, to be capped at $25 billion euros (£23.7 billion), to help Europe's biggest economy weather a growing recession.
So far, however, increased spending in economies around the world has yet to boost confidence among businesses, investors or consumers.
Data yesterday showed US consumers cut spending in November as their incomes shrank, pointing to a prolonged recession for the world's largest economy.
New orders for long-lasting manufactured goods fell 1 per cent in November, following a steeply revised plunge of more than 8 per cent the prior month, while the number of US workers filing for jobless benefits for the first time soared by 30,000 to a 26-year peak in the week ended December 20th.
Nearly 2 million US workers have lost jobs this year, driving the unemployment rate to 6.7 per cent.
The US Federal Reserve and the Bank of Japan have both cut interest rates to near zero, and more rate cuts are expected in Britain and the 15-country eurozone in early 2009.
Germany's intended stimulus plan was smaller than the €40 billion measures originally reported for new projects and was unlikely to ease pressure on chancellor Angela Merkel, who has been attacked by politicians and economists who want her government to do more to boost the economy.
Reuters