Shares plunged on Wall Street and the dollar fell sharply tonight after an increase in jobless claims and weak signals from industry prompted fears that the US is heading for a double-dip recession.
The Dow Jones index fell 200 points at one stage in morning trading in New York after the US labour department reported that 500,000 new claims for unemployment benefit were filed in the week ending 14 August – an increase of 12,000 on the previous week and the highest figure for nine months.
The already gloomy mood was compounded when the Philadelphia Fed, one of the Federal Reserve's 12 regional reserve banks, published its monthly health check on manufacturing in America's mid-Atlantic region. The survey, seen by Wall Street as a barometer of US industrial conditions, showed activity had contracted unexpectedly for the first time since July 2009.
President Barack Obama called on Congress to pass a bill providing support for small businesses, but Wall Street believes the threat to the world's biggest economy will also require action by the Federal Reserve to expand the money supply through its quantitative easing programme. James Bullard, president of the St Louis Fed, said tonight that the central bank would need to step up its purchases of bonds should the threat of deflation intensify.
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A senior Fatah leader said here on Thursday that the Israeli-Palestinians proximity talks did not yield any progress that meets previously set conditions.
The meeting between US President Barack Obama and Israeli Prime Minister Benjamin Netanyahu in Washington on Tuesday did not provide any good signs, Nabil Shaath, a Fatah Central Committee member, told reporters in Cairo after meeting with Arab League Secretary-General Amr Moussa.
Shaath and Moussa discussed the Middle East peace process and ways to achieve the Palestinian reconciliation and end the Israeli embargo imposed on the Gaza Strip since 2007.
"There has not been any progress through the indirect talks, and thus, a meeting (of the Arab Peace Initiative Follow-up Committee) requested by the Palestinian National Authority and was agreed to by Secretary-General of the Arab League, will take place soon," Shaath said, adding "that meeting will assess the whole situation and will make an Arab decision on the issue."
According to the Fatah leader, the Palestinian decision will be submitted to the Arab Peace Initiative Follow-up Committee's meeting scheduled for July 29, to coordinate a concerted Arab action.
Maze cartoon a Lamboghini racing down the road. Analogy of the economy. Created by Yonatan Frimer
