U.S. News: Hints of Stability Emerge in Fragile Financial System
Even as job losses mount and profits plunge, some glimmers of stabilization are emerging in global markets.</br></br>In the U.S., Europe and China, separate surveys of manufacturers' purchasing managers all inched upward in January, suggesting that the contraction in manufacturing activity could be slowing. The interest rates at which banks lend to one another are easing. And some credit markets are thawing.</br></br>Analysts say rock-bottom official interest rates, promises of massive fiscal-stimulus packages and central banks' other efforts to revive markets have helped ease some tensions in financial markets and may help put a floor under falling business confidence. As the government rescue efforts work their way through the markets, they could lay the groundwork for the global economy to begin escaping the worst of the storm.</br></br>But the current hints of stabilization come at very low levels, and with the financial system still fragile, suggesting the year ahead will be rocky at best. And the hopeful signs could still turn ugly, especially with employment falling and draining household incomes.</br></br>"Some of the numbers we had been seeing were just jaw-droppingly awful," said Ken Wattret, economist with BNP Paribas in London. "What we're getting now is a sense that the pace of contraction won't continue at that rate. But it's really a question of being less bad."