The news at a glance

Jobs report: A brief respite from bad news?; Currency: Swiss franc and Japanese yen devalued; Unions: Verizon workers on strike; Finance: AIG sues Bank of America; Oil: Shell gets green light to drill in Arctic

Jobs report: A brief respite from bad news?

July jobs figures provided a “momentary sigh of relief” last week amid otherwise grim economic news, said Motoko Rich in The New York Times. The labor market beat expectations by adding 117,000 jobs last month, lowering the unemployment rate from 9.2 to 9.1 percent. The gains came entirely from the private sector, which added 154,000 jobs, but tens of thousands of layoffs by local and state governments canceled out some of that growth. Employment figures for May and June were also revised upward slightly. “It gives us some temporary relief” from the risk of a double-dip recession, said Nigel Gault, an economist with IHS Global Insight.

While a decline in the unemployment rate is a move in the right direction, a “look under the hood” of the jobs report reveals “plenty of bad news to go around,” said Jeff Cox in About 137,000 “discouraged workers”—people who are unemployed but no longer looking for work—dropped out of the labor market completely in the past month, and they aren’t included in the unemployment tally. “Stick all those people back in the workforce and you wipe out the job creation.” What’s more, jobless workers now spend an average of 40.4 weeks—about 10 months—out of work, twice as long as they did when President Obama entered the White House.

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Currency: Swiss franc and Japanese yen devalued

Switzerland and Japan both moved to weaken their currencies last week, said Peter Garnham in the Financial Times. The franc and the yen have surged recently as jittery global investors seek safe havens from debt crises in the U.S. and the eurozone. A sudden rise in their currency values could hamper Swiss and Japanese exports, but strong global demand for the currencies is proving “beyond the control” of Swiss and Japanese central bankers.

Unions: Verizon workers on strike

A walkout this week by 45,000 Verizon workers is the largest U.S. strike in four years, said Steven Greenhouse in The New York Times. “Sharp battle lines” over proposed cuts to health care and pension benefits suggest that the walkout could be drawn out. The striking workers are mostly employed in Verizon’s declining landline businesses, where Verizon maintains that cuts are necessary to stay competitive. Workers argue that they should not have to agree to steep concessions when the company, which paid its top five executives $258 million over the past four years, remains profitable.

Finance: AIG sues Bank of America

Insurance giant AIG this week alleged that Bank of America had committed “massive fraud” by bundling toxic mortgage bonds into securities in the run-up to the housing bust, said Erik Holm in The Wall Street Journal. AIG, which remains largely taxpayer-owned, has filed a $10 billion lawsuit against BofA, accusing it and two businesses it acquired, Merrill Lynch and Countrywide, of willfully misrepresenting the mortgage bonds as safe. A BofA spokesman said AIG’s losses were “attributable to its own excesses and errors.”

Oil: Shell gets green light to drill in Arctic

Shell Oil has received initial approval from the U.S. Department of the Interior to drill exploratory wells in the Arctic Ocean next year, said Becky Bohrer in the Associated Press. Shell plans to drill four wells in the Beaufort Sea off Alaska’s north coast to exploit vast oil and gas reserves there. Critics of the plan say that a spill in the Arctic would be devastating to the local environment, and that neither the technology nor the infrastructure exists to respond to a disaster in the region’s harsh conditions.

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