SIGN OF TROUBLED TIMES
Typical US home now cheaper than HDB flat
By Zhen Ming
SO, how bad are things over there, really?
Hungry for first-hand news from the US “economic warfront”, I posed this delicate question about the US economy to Sok (a visiting sister-in-law back from Los Angeles for her year-end break).
It’s truly bad, she lamented, with an atypical grimace on her usually-beaming face.
When we last met in LA around Christmas in 2007, they were happier times.
Back then, our families shopped and dined at The Grove — a boutique outdoor shopping mall located across the street from the world-famous LA Farmer's Market — where, on a good day, you might just stumble upon a Hollywood celebrity (or two).
Meltdown woes
“But today The Grove is much, much quieter,” Sok reported. “You can feel it in the frigid air. And it’s all no thanks to the meltdown on Wall Street.”
To be sure, both Sok and her husband Murali hold relatively stable jobs. She works at an LA library while he teaches at the University of Southern California.
But, not unlike many other Asian expatriates living in America, they, too, worry about whether home prices in the US will ever stop dropping — what with the median home over there now costing only US$180,800 (S$268,500).
Yes, the median American home is now cheaper than most HDB flats in Singapore.
More importantly, my “Chindian” in-laws also worry whether some of their friends, especially those working in California’s Silicon Valley, could soon lose their jobs.
Latest figures
All in all, US employers shed a total of 2.6 million jobs in 2008 — the worst-ever year since 1945.
This latest job loss figure point to a US jobs market that’s still in a free fall.
Many US companies across all sectors of the economy have, in fact, resumed mass layoffs (after a brief respite over the year-end holidays).
Last week alone, insurance provider Cigna Corp, aluminum producer Alcoa Inc, data-storage company EMC Corp and computer products maker Logitech International have announced large job cuts.
"The toughest six months will be the just-completed fourth quarter and the first quarter of this year," said Mr Robert Barbera, chief economist at the Investment Technology Group, a research and trading firm.
Hope and recovery
But Mr Barbera also noted that a widely-anticipated trillion-dollar stimulus package should begin to revive the US economy in the second half of 2009.
Meanwhile, US President-elect Barack Obama has said that the alarming job figures showed that Washington should act quickly and decisively to enact his stimulus plan.
Behind the numbers were "real lives, real suffering, real fears", said Mr Obama.
Overall, US unemployment rate jumped to 7.2 per cent in December — the highest since January 1993.
But that’s just the tip of the US job-loss iceberg.
"Factoring in discouraged workers, unemployment is closer to 9.4 per cent," said Mr Peter Morici, an economist at the University of Maryland. "Add workers in part-time positions that cannot find full-time employment and the hidden unemployment rate is 14.5 per cent."
Nevertheless, the official total of more than 11 million jobless Americans — about 2.3 times the entire population of Singapore — is already quite staggering.
I read, with personal concern, the report that US aerospace giant Boeing expects its 68,000-person workforce will shed 4,500 jobs in the coming 12 months.
The big majority of Boeing’s layoffs will occur in the Puget Sound area of Washington state. That’s where a cousin and her American husband (a Boeing engineer) live.
Back home
Back in Singapore, the local labour market is also showing signs of softening.
The jobless rate among locals (seasonally adjusted) actually rose to 3.3 per cent in September — up from 3.1 per cent in June.
Expect retrenchments in Singapore to pick up pace in 2009.
In the third quarter of last year, a total of 2,346 workers were retrenched — up from 1,798 in the previous quarter.
So, it’s the same everywhere during this global recession.
Expect the “things over here” (in Singapore) — just like the “things over there” (in the US) — to get worse first (before they can get better later on).
The current global economic flu, after all, must be allowed to run its full course.
Source: The New Paper, Sun 11 Jan 2009
Typical US home now cheaper than HDB flat
By Zhen Ming
SO, how bad are things over there, really?
Hungry for first-hand news from the US “economic warfront”, I posed this delicate question about the US economy to Sok (a visiting sister-in-law back from Los Angeles for her year-end break).
It’s truly bad, she lamented, with an atypical grimace on her usually-beaming face.
When we last met in LA around Christmas in 2007, they were happier times.
Back then, our families shopped and dined at The Grove — a boutique outdoor shopping mall located across the street from the world-famous LA Farmer's Market — where, on a good day, you might just stumble upon a Hollywood celebrity (or two).
Meltdown woes
“But today The Grove is much, much quieter,” Sok reported. “You can feel it in the frigid air. And it’s all no thanks to the meltdown on Wall Street.”
To be sure, both Sok and her husband Murali hold relatively stable jobs. She works at an LA library while he teaches at the University of Southern California.
But, not unlike many other Asian expatriates living in America, they, too, worry about whether home prices in the US will ever stop dropping — what with the median home over there now costing only US$180,800 (S$268,500).
Yes, the median American home is now cheaper than most HDB flats in Singapore.
More importantly, my “Chindian” in-laws also worry whether some of their friends, especially those working in California’s Silicon Valley, could soon lose their jobs.
Latest figures
All in all, US employers shed a total of 2.6 million jobs in 2008 — the worst-ever year since 1945.
This latest job loss figure point to a US jobs market that’s still in a free fall.
Many US companies across all sectors of the economy have, in fact, resumed mass layoffs (after a brief respite over the year-end holidays).
Last week alone, insurance provider Cigna Corp, aluminum producer Alcoa Inc, data-storage company EMC Corp and computer products maker Logitech International have announced large job cuts.
"The toughest six months will be the just-completed fourth quarter and the first quarter of this year," said Mr Robert Barbera, chief economist at the Investment Technology Group, a research and trading firm.
Hope and recovery
But Mr Barbera also noted that a widely-anticipated trillion-dollar stimulus package should begin to revive the US economy in the second half of 2009.
Meanwhile, US President-elect Barack Obama has said that the alarming job figures showed that Washington should act quickly and decisively to enact his stimulus plan.
Behind the numbers were "real lives, real suffering, real fears", said Mr Obama.
Overall, US unemployment rate jumped to 7.2 per cent in December — the highest since January 1993.
But that’s just the tip of the US job-loss iceberg.
"Factoring in discouraged workers, unemployment is closer to 9.4 per cent," said Mr Peter Morici, an economist at the University of Maryland. "Add workers in part-time positions that cannot find full-time employment and the hidden unemployment rate is 14.5 per cent."
Nevertheless, the official total of more than 11 million jobless Americans — about 2.3 times the entire population of Singapore — is already quite staggering.
I read, with personal concern, the report that US aerospace giant Boeing expects its 68,000-person workforce will shed 4,500 jobs in the coming 12 months.
The big majority of Boeing’s layoffs will occur in the Puget Sound area of Washington state. That’s where a cousin and her American husband (a Boeing engineer) live.
Back home
Back in Singapore, the local labour market is also showing signs of softening.
The jobless rate among locals (seasonally adjusted) actually rose to 3.3 per cent in September — up from 3.1 per cent in June.
Expect retrenchments in Singapore to pick up pace in 2009.
In the third quarter of last year, a total of 2,346 workers were retrenched — up from 1,798 in the previous quarter.
So, it’s the same everywhere during this global recession.
Expect the “things over here” (in Singapore) — just like the “things over there” (in the US) — to get worse first (before they can get better later on).
The current global economic flu, after all, must be allowed to run its full course.
Source: The New Paper, Sun 11 Jan 2009
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