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Australia Plans to Cut Skilled Visas by 14% as Labor Market Weakens

Australia’s Immigration Minister, Chris Evans, has said that the nation will be reducing the number of skilled migrants visas by 18,500. This will be the first of such cuts in 10 years as the domestic labor market weakens to 5 year highs. Such a move will shrink the intake of skilled visas by 14% to 115,000.

In February, the unemployment rate leapt to levels last seen in Oct. 2004. The figure jumped by 0.4% points to 5.2% after economists had expected the figure to print to only 5.0%. The second month of the year also saw 53.8K full-time jobs converted into 55.6K part-time ones, signaling deeper labor-market weakness.

Evans told the Australian Broadcasting Corp. radio station that “we don’t want people coming in who are going to compete with Australians for limited jobs.”

The actions taken by the country’s immigration board may bolster inflation. In the final quarter of 2008, general consumer prices actually fell by -0.3%; the country felt the effects of deflation. Now, since there will be less workers available to meet the labor needs of job providers, employers will need to bid up the price of labor. As this happens the extra cost of labor is likely to be transferred to the cost of goods sold to the public. Hence inflation may rise.

This may sound good in theory, but since the visa cuts will only apply to skilled workers, the effect of such higher prices may only be felt in those goods which employ such people. Such goods may include electronics, research and development, and financial services.

Hence, the visa cuts might not actually help the common Australian, but instead aid those who are highly educated and are well-off on a long-term basis.
– LG

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Euro Monetary System Risks BREAKUP As Unemployment Soars Higher Than Expected

FIRM EARNING $500M BETTING AGAINST MORTGAGE SECURITIES SEES EURO MONETARY SYSTEM ENDING…

Unemployment Rises to 8.2% With Forecasts Seeing 8.1%…

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U.S. Consumer Prices Rise Above Expectations…EXCLUDING ENERGY

When excluding food and energy, whose primary component (gasoline) rose in price by 6.0% on the month, the Consumer Price Index rose 0.2% in the month of January alone. Expectations called for a rise of only 0.1%. December’s figure stayed flat from the month prior. Overall inflation in the 12 months through the first month has come out to be 1.7%, a tick down from the previous month’s data, but still 0.2% points above expectations.

In a speech given on Wednesday, Fed Governor Ben Bernanke stated that such developments would “help to better stabilize the public’s inflation expectations, thus contributing to keeping actual inflation from rising too high or falling too low.” Indeed, the central bank’s projected 2.0% longer-run inflation target seems to be on track to be met.

On the news, the U.S. Dollar continued it’s overnight rebound against the Euro. -LG

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