Friday November 7 2008 09.24 GMT
President-elect Barack Obama will turn to a hand-picked team of economists, business leaders and politicians to help him grapple with the economic crisis today, with the world's richest countries now facing their worst year since the end of the second world war.
The scale of the challenge facing Obama and the 17 members of the newly created Transition Economic Advisory Board (TEAB) will be underlined later today when the latest US jobless figures are released, showing a huge leap in layoffs. Non-farm payrolls could have fallen by as much as a quarter of a million workers, analysts believe, as the American economy continues to suffer from the global downturn.
Obama will meet with the TEAB - whose members were appointed yesterday - in Chicago to debate how to deal with threat of a deep global recession, before giving his first news conference since this week's election.
With the IMF slashing its forecast for the world economy in 2009 last night, Obama and the 17 members of TEAB are under pressure to deal with the crisis, even though he does not take office for over two months.
The membership of TEAB shows that Obama will seek advice from across the political and economic spectrum. It includes former Treasury secretary Lawrence Summers and former Federal Reserve chairman Paul Volcker, as well as the chief executives of Google and Xerox and billionaire investor Warren Buffett – who will join the meeting by speakerphone.
Volcker, 81, led the Fed during the Reagan administration, hiking interest rates and tightening up on credit to bring inflation under control.
Obama may also announce his choice of Treasury secretary later today. The list of possible candidates includes both Volcker and Summers, as well as Timothy Geithner, president of the Federal Reserve Bank of New York and New Jersey Governor Jon Corzine, a former executive at the investment bank Goldman Sachs.
Whoever gets the job will take on US economy that is suffering its worst crisis since the depression of the 1930s.
America's economy is now expected to shrink throughout the whole of Omaba's first year in the White House. In its latest forecast, the IMF slashed its predictions for economic growth – warning that activity is already slowing quickly.
The IMF now believes the US economy will decline by 0.7% during 2009. The recession is expected to be even tougher in the UK, where the IMF sees a 1.3% contraction. Overall, the world's advanced economies will shrink by 0.25% during 2009 – which would be the first annual contraction since the postwar period – it said.
"The US economy will suffer, as households respond to depreciating real and financial assets and tightening financial conditions," warned the IMF.
"Growth in the euro area will be hard hit by tightening financial conditions and falling confidence. In Japan, the support to growth from net exports is expected to decline," it added.
The IMF offered some optimism, saying that further coordinated action by world leaders to support financial markets and businesses could limit the decline in world growth.
Such measures will be discussed at a meeting of 20 industrialised nations and biggest emerging economies in Washington on November 15.
Having fallen sharply on Wednesday and Thursday, world stockmarkets staged a small rally today. The FTSE 100 was up 71.5 points, or 1.6%, in early trading at 4343, and the Dow Jones is also expected to rise when trading begins on Wall Street.
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