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12 BUSINESS & FINANCE maltatoday, WEDNESDAY, 2 OCTOBER 2013 US government shutdown could hurt markets if prolonged US stock index futures pointed to a modestly higher open on Tuesday, indicating a positive start to the fourth quarter, though concerns remained following a partial shutdown of the US government. Congress missed a midnight deadline to agree on a spending bill, resulting in up to 1 million workers being put on unpaid leave. After missing the deadline, Republicans and Democrats continued a bitter blame game, each side shifting responsibility to the other in efforts to redirect a possible public backlash. The release of the government's report on construction spending in August, which had been scheduled for 10am on Tuesday, was delayed. German unemployment in surprise increase The German government said higher unemployment was partly down to a cut in the number of government job schemes. The number of people out of work in Germany unexpectedly rose by 25,000 in September to just under three million. Analysts had pencilled in a fall of 5,000, following a rise of 9,000 in August. The Federal Labour Office said there had been a cut in the number of government job schemes. Meanwhile, new figures showed unemployment across the eurozone dropping slightly in August to a rate of 12%. The rise in German joblessness pushed the unemployment rate in Europe's biggest economy from 6.8% to 6.9%. "The seasonal increase in September is due to labour market policies providing less relief," said Heinrich Alt of the Labour Office. He added that the department was changing to longer-term policies intended to train the unemployed. Despite the rise, the unemployment rate is still close to its lowest level since reunification more than 20 years ago. Total unemployment in the eurozone was 19.2 million in August, with analysts saying the bloc is showing increasing signs of stabilisation. Unemployment fell by 5,000 in the month after drops of 11,000 in July and 18,000 in June, according to official figures. As ever, the figure disguised wide variations in labour markets across countries that use the euro. The lowest unemployment rate was recorded in Austria at 4.9%, while Greece's latest figures showed 27.9% of workingage people did not have jobs. Ben May, European economist at Capital Economics, said the figures provided further tentative signs that labour market conditions were improving. "Since the labour market tends to react to changes in economic conditions with a bit of a lag, the health of the employment outlook may continue to improve over the coming months," he said. But he added that with figures showing weak growth in the region as a whole, unemployment looked set to fall "only very gradually at best". Europe's statistics agency, Eurostat, said that compared with a year ago, the unemployment rate increased in 16 member states, fell in 11 and remained stable in just one – Poland. The youth unemployment rate in the euro area fell by 52,000 on August 2012, to 3.46 million. This meant 23.7% of those aged under 25 were unemployed, compared with 23.4% the previous year. "People expect this will be relatively short-term, with the impact hopefully minimal, but the longer it goes on, the more pressure Washington will face," said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York. "If this lasts longer than a few days, you'll really start to see volatility pick up." Siemens to axe 15,000 jobs German industrial giant Siemens is to cut up to 15,000 jobs as part of a cost-cutting programme. It will cut about 4% of its 370,000-strong workforce but aims to avoid compulsory redundancies, according to a company spokesman. The firm will shed 5,000 jobs in Germany and another 10,000 jobs abroad. It comes after Siemens axed its former chief executive, Peter Loescher, earlier this year over falling profitability. Siemens and its unions have reached an agreement over about half of the job cuts and a deal on the other half will follow, the spokesman told news agencies. The firm has issued two warnings about profit margins during the last fiscal year, sending shares lower. Loescher led the company from 2007 and the Austrian was the first person recruited from outside the company to run the business. Toshiba trying to restructure operations at its TV division Japanese electronics firm Toshiba has said it will halve the number of staff in its TV division to 3,000 as it looks to revamp the unit's operations. The changes will also see the firm close two of its three overseas TV manufacturing facilities. Toshiba said it would focus on emerging markets including Asia and Africa, and end sales in "unprofitable regions". Toshiba, like other Japanese TV makers, has been hit by slowing demand, falling prices and increased competition. The company's digital products division, which includes TV manufacturing, saw its losses widen to 16.3bn yen ($166m; £103m), in the financial year to 31 March, compared with a loss of 3.3bn yen a year earlier. Toshiba, which makes the Regza brand TV sets, said in a statement that the changes were aimed "toward improving profitability and strengthening foundations of the business". The firm said it would separate the TV business from its Digital Products & Services Company and merge it with Toshiba Home Appliances Corporation. Toshiba said that it would move resources towards making large screen ultra high-definition (HD) 4K LCD TVs "where growing demand is expected". Leading global manufacturers have been looking at this segment, which offers four times the amount of detail as 1080p high-definition TV, as an area of potential growth. Panasonic and South Korea's LG are among the manufacturers that have launched ultra HD TVs. Toshiba's move to focus on the technology also comes as Japan is looking to become the the first country to broadcast 4K programming over satellite from 2014, in time for the football World Cup. Earlier this year, a Japanese telecoms company said that it was carrying out tests to try to prove that 4K-resolution video could be streamed over the internet to television set-top boxes. YOUR FIRST CLICK OF THE DAY www.maltatoday.com.mt

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