MarketWatch

By Intelligent Investor · 15 Nov 2002

By Intelligent Investor ·
15 Nov 2002

The big news from Wall Street last week was the 0.5% cut in official interest rates by the Federal Reserve. This takes US interest rates down to 1.25%, their lowest level in 40 years. This unexpectedly large cut should have a strong stimulatory effect on the US economy. Last weeks 'mid-term congressional elections handed control of both houses of Congress to George Bush. This increases the likelihood of more tax cuts and free trade agreements, which will further boost US growth.

On the local front, unemployment dropped to 6% in October, the lowest level for two years. This was a good result given the impacts of drought and a slow world economy. It's not all positive news though, as the growth was only in part-time jobs, while full-time jobs actually declined.

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