According to the RBC Cash Index, US consumer confidence dropped to a mark of 48.5 in early February, from 56.3 last month.

WASHINGTON, Feb. 8--People’s confidence in the economy sank even lower amid heightened fears about shrinking job opportunities and the possibility the country is falling into recession.
According to the RBC Cash Index, confidence dropped to a mark of 48.5 in early February, from 56.3 last month. The new reading was the worst since the index began in 2002 and surpassed the previous low reached in January, AP reported.
The continued erosion in confidence comes despite the fact that Federal Reserve Chairman Ben Bernanke has gotten much more forceful in cutting interest rates to induce people to buy more and bolster the economy. The Fed slashed interest rates twice over the span of just eight days in January--its most aggressive rate reductions in two decades.
The White House and Congress, meanwhile, want to energize the economy by giving rebates to people and tax breaks to businesses. Congress passed an emergency plan Thursday that sends rebates to most taxpayers in an effort to spark the economy. President Bush has indicated he would sign the measure.
Still, an increasing number of economists worry that the rescue efforts by the Fed and the politicians may not be enough to avert the first nationwide recession since 2001. Some economists believe the economy has already toppled into a recession. “Consumers are being hit by a series of body blows economically,“ said Carl Tannenbaum, an economic consultant in Chicago.
One of the biggest causes of angst: a weakening job market, analysts said. US employers cut jobs in January for the first time in more than four years, the government reported last week. Wage growth also slowed last month, the report showed.
Another source of anxiety: a housing slump that continues to drag on. The housing bust has led to record-high home foreclosures and has dragged down home values--usually peoples’ single biggest asset--making them feel less wealthy. In addition, high energy and food prices are squeezing budgets and turbulence on Wall Street is shrinking nest eggs. All these things are making people feel more insecure about their own financial fortunes and more concerned about the direction of the economy as a whole.

MOSCOW, Feb. 8--State-controlled natural gas company Gazprom said Thursday it would cut off supplies of Russian gas to Ukraine unless its neighbor makes arrangements by Monday to pay more than a billion dollars in debt, but said such a move would not affect other European customers.
Gazprom’s cutoff to Ukraine in January 2006 resulted in supply reductions to Western European countries for several days because they get gas through pipelines that cross Ukraine, AP wrote.
Most of Ukraine’s gas comes from Central Asia through Gazprom pipelines. But this year Ukraine has bought Russian-origin gas to make up for shortages in Central Asian supplies, said Ilya Kochevrin, a spokesman for Gazprom’s export division.
Russian gas currently accounts for about one-quarter of the amount going to Ukraine and that is what would be cut if an agreement on payments of the $1.5 billion (975 million euros) debt is not reached, Kochevrin said.
There was no immediate comment from Ukrainian authorities, but some analysts noted that the announcement comes amid tensions between Ukraine and Russia over Ukraine’s moves toward joining NATO and that the cutoff threat came almost on the eve of Western-leaning Ukrainian President Viktor Yushchenko’s visit to Moscow next week.
Yushchenko’s talks in Moscow are expected to include tough discussion of the complex and murky circumstances under which Ukraine gets gas from and via Russia.
“It’s a game. Negotiations are upcoming and one needs to prepare for them,“ said Volodymyr Nesterenko, an energy analyst with Concorde capital brokerage in Kiev.
Kochevrin denied there was any political context to the threat and its timing. “This is purely a commercial issue,“ he told reporters in a conference call.
Ukraine purchases all of its gas through a Switzerland-based middleman company called RosUkrEnergo, which is half-owned by Gazprom. “Technically, it’s a debt to RosUkrEnergo,“ Kochevrin said.
Ukraine’s Prime Minister Yulia Tymoshenko, who is also expected in Moscow later this month, is leading a campaign to get rid of RosUkrEnergo, which critics suspect is essentially a mechanism for siphoning money into private pockets. Yushchenko has maintained a more moderate stance on the middleman, arguing that reconsidering the current gas agreement could result in much higher gas bill for Ukraine.

Brussels, Belgium, Feb. 8--The euro and the pound fell against the dollar on Thursday after the European Central Bank held interest rates and the Bank of England trimmed them, as expected, citing growth concerns, analysts said.
The euro fell to $1.4479 around 2200 GMT from $1.4633 in New York late Wednesday. The pound was at $1.9423, down from $1.9606, AFP wrote.
Against the Japanese currency, the dollar rose to 107.48 yen from 106.56.
“Concerns about growth from both central banks caused the euro and British pound to sell off aggressively,“ wrote Forex Capital Markets (FXCM) analysts, Kathy Lien and Terri Belkas.
The ECB held its main interest rates steady at 4.0 percent, but analysts detected a change in the tone of ECB president Jean-Claude Trichet, who had previously warned about the need for a rate hike to fight inflation.
In comments to reporters after the rate decision, Trichet stressed that inflation was the bank’s priority, but he also warned of uncertainty clouding economic growth and the risks of a downturn in the eurozone economy.
Trichet also dropped a previous reference to the ECB’s willingness to take “preemptive“ steps to prevent inflation and he also warned that a “sharp slowing“ in growth was possible ahead.
Trichet “has finally bowed to market pressures and recognized that resiliency of the eurozone to slower US growth is cracking,“ the FXCM analysts said.
Analysts at Morgan Stanley said a slowdown in the 15-nation bloc “might even open the door for a cut later in the year“. They added, “But, at this stage, the ECB does not seem to be in a rush to slash rates and unchanged rates seem likely.“
The pound fell after the Bank of England (BoE) trimmed its key interest rate by a quarter-point to 5.25 percent on concerns of slowing economic growth.
“The Bank of England provided a balanced statement which suggested it was in no hurry to cut rates again due to inflation concerns,“ Matthew Sharratt at Bank of America said. Sharratt predicted that deteriorating economic conditions would lead the BoE to cut rates to 4.5 percent by the year’s end. The next quarter-point cut should come in May, he said.

TOKYO, Feb. 8--Machinery orders by Japanese firms fell in 2007 for the first time in five years, government figures have shown. Core private-sector machine orders--seen as a key indicator of corporate investment--were down by 4 percent from 2006, BBC reported.
The decline came after orders slipped 3.2 percent in December from the previous month, after a 2.8 percent drop in November.
The figures will add on fears Japanese firms are curtailing spending amid a US economic slowdown and the data sent the Nikkei stock index down 1.44 percent.
There have been persistent concerns about whether Japan’s fragile economic recovery will be able to withstand a sharp slowdown in growth in the US, its main export market.
“A slowdown in exports, which had led Japan’s economy for the past five years, is now inevitable,“ said Naoki Murakami, senior economist at Goldman Sachs.
The Bank of Japan kept interest rates steady at 0.5 percent at its last meeting and some analysts are now predicting that the next move could be a cut--a dramatic change of tone from just a few months ago.
The economics minister, Hiroko Ota, said the government was keeping a keen eye on economic developments, but that orders were expected to pick up over the January to March period.
She added, “We need not be overly pessimistic about the current state of machinery orders.“
The negative data hurt shares in Japan’s construction equipment makers and sent the benchmark Nikkei 225 index down 1.44 percent, to close at 13,017.24.

Air transportation is contributing to economic development and generating wealth around the world.

LONDON, Feb. 8--European aircraft maker Airbus said Thursday it expected the world’s fleet of large passenger jets to double in the next 20 years, with congestion in the skies set to spur development of larger and greener aircraft.
World passenger traffic was forecast to increase by 4.9 percent per year in the 2007-2026 period, almost trebling in two decades, while air freight traffic would rise by 5.8 percent annually.
Airbus said the market for passenger and freight jets would be worth $2.8 trillion (1.9 trillion euros) between 2007 and 2026, adding that 24,300 planes would be produced.
Both these figures were higher than previous predictions given by the company.
“Air transportation is definitely a growing industry contributing to economic development and generating wealth around the world,“ Airbus chief operating officer John Leahy told reporters in London, AFP wrote.
The world’s fleet of large passenger jets (more than 100 seats) and freight planes numbered 14,980 at the end of 2006 and was forecast by Airbus to grow to nearly 33,000.
The greatest demand for new planes will come from the Asia Pacific region, where airlines will take delivery of 31 percent of new planes in the next 20 years, compared with 24 percent for Europe and 27 percent for North America.
Airlines in China, the United States and Britain were identified as the biggest individual customers over the period.
With all the new planes set to take to the air and limited airport infrastructure, Airbus forecast increased congestion on flight routes that would drive growth of bigger planes.
“Increasing congestion ... has seen the emergence of a clear trend towards larger aircraft,“ the company said in a corporate presentation.
“This is evident in all seat categories ... and will result in the average aircraft size increasing by as much as 25 percent over the next 25 years.“
This fits with the strategy of the European manufacturer--chief rival to US plane maker Boeing--which has developed the world’s biggest passenger jet, the superjumbo Airbus A380.
Airbus also acknowledged that the increased number of planes meant more greenhouse gas emissions and therefore increased pressure on aircaft manufacturers to reduce pollution.

NEW YORK, Feb. 8--Exxon Mobil Corp has won court orders freezing up to $12 billion in Venezuelan assets around the world as it fights for compensation for operations lost to President Hugo Chavez’s nationalization drive.
The largest US company sought the asset freeze to guarantee repayment should it win arbitration over the Cerro Negro heavy oil project, Reuters reported.
The move is the boldest challenge yet by an international oil major against any of the governments around the world that have moved to increase their holds on natural resources as energy and commodity prices have soared.
“To me it sounds like a very aggressive tactic,“ said Stephen Zamora, professor of international law at the University of Houston Law Center. “I can’t really say that I’m aware this has been used in other investment disputes. They may be trying to get the government to settle.“
Exxon--which last week posted the largest ever year’s profit by a US company--said on Thursday it has received court orders in Britain, the Netherlands and the Netherlands Antilles each freezing up to $12 billion in assets of Venezuela state oil firm PDVSA. An Exxon spokeswoman said the total that could be frozen worldwide was $12 billion.
Exxon also won a court order from the US District Court for the Southern District of New York in December freezing more than $300 million belonging to PDVSA, seeking to guarantee repayment should it win the arbitration.
PDVSA, one of the largest suppliers of crude oil to the United States, was not immediately available for comment. The White House and the US State Department also declined to comment.
Venezuela’s sovereign bonds sold off after the court orders surfaced.
Left-winger Chavez, who regularly clashes with the Bush administration, took over Exxon Mobil and ConocoPhillips stakes in multibillion-dollar heavy oil projects in Venezuela’s oil region last June.
The move was part of the left-wing leader’s drive to nationalize key industries including utilities and telecommunications companies owned by private companies.

BERLIN, Feb. 8--Some 10,000 German metal workers walked off the job on Thursday as a strike for higher wages gained momentum and shut down several production plants, unions said.
The IG Metall trade union said 1,500 workers downed tools at the ArcelorMittal factory in Bremen in northern Germany while 1,000 went on strike at ThyssenKrupp’s plant in Duisburg in the west, AFP reported.
The strike affected a dozen other plants, most of them in Germany’s industrial heartland in the Ruhr area.
IG Metall said some factories ground to a halt for eight hours and vowed that Friday would see further labor action.
“Today’s strikes are just a taste of what we could do, and will do if we need to, in the coming weeks,“ said Oliver Burkhard, the union’s leader in North-Rhine Westphalia state.
“On Feb. 19, at the end of the fourth round of wage talks, we should know where we stand.“
Three rounds of negotiations have failed to yield an agreement between industry bosses and IG Metall, which is calling for 85,000 workers to receive wage raises of eight percent. The fourth round of talks starts on Tuesday.
Unions have stepped up their wage demands this year following several years of moderation during which the economy has posted strong growth while workers have seen their buying power undermined by rising inflation.