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Swiss National Bank Governing Board member Thomas Jordan said the bank would raise borrowing costs if it saw the risk of a wage-price spiral developing, NZZ am Sonntag reported, citing an interview.

Unions “must be aware'' that trying to compensate for “unpleasantly high'' inflation by increasing salaries would fuel inflation, Jordan is quoted as saying in the interview.

Jordan said interest rates don't need to be changed for now because inflation is likely to drop below the bank's 2 percent limit, assuming oil prices stabilize, Jordan told NZZ am Sonntag pay day loans.

Slowing growth is also likely to damp inflation, he said. The SNB expects to see a “distinct slowdown'' rather than a recession in Switzerland, Jordan is quoted as saying. Overall growth is likely to be 1.5 percent to 2 percent in 2008 and recover in the course of 2009, Jordan said.

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Australia's central bank will probably leave its benchmark interest rate at a 12-year high as it assesses whether the economy is slowing enough to cool the fastest inflation in almost two decades.

Governor Glenn Stevens will keep the overnight cash rate target at 7.25 percent tomorrow in Sydney, according to all 25 economists surveyed by Bloomberg News. Six say the bank will raise the rate by the end of the year, and one forecasts a cut.

Slumping stock markets, record gasoline prices and rising borrowing costs have slashed consumer confidence and forced companies to trim spending and fire workers. Policy makers said a month ago it “was important for the slowing trend to continue'' in Australia's $1 trillion economy, which grew in the first quarter at the weakest pace in almost two years.

“The bank should be starting to feel a bit more confident that the demand slowdown they're looking for is on track,'' said Shane Oliver, chief economist at AMP Capital Investors in Sydney. “That will head off the need for another rate hike, regardless of the short-term threat to inflation coming from gasoline.''

The central bank has left borrowing costs unchanged since March, when it raised the benchmark rate by a quarter point for the fourth time in seven months.

The bank's board will announce its July decision at 2:30 p.m. in Sydney tomorrow.

The Australian dollar traded today near its highest in 25 years as prices of commodities the nation exports, from iron ore to coal, rose to records. The currency rose to 96.25 U.S. cents at 10:38 a.m. in Sydney from 96.20 cents late on June 27.

Global View

Australia's current interest rates “are essential'' to restrain inflation, which poses a greater threat to the economy than the global credit crunch, Stevens said on June 13.

Monetary policy needs to damp domestic demand “because inflation has already picked up,'' he said.

Steven's concern about accelerating inflation is being echoed by central banks around the world easy payday loans. The U.S. Federal Reserve kept its benchmark rate at 2 percent last week and warned faster inflation may accompany some strengthening of the economy. European Central Bank President Jean-Claude Trichet has left open the option of raising interest rates after July.

Surging fuel, food and housing costs pushed Australia's annual core inflation to 4.4 percent in the first quarter, the highest rate in almost 17 years. The central bank aims to keep price increases between 2 percent and 3 percent on average.

Building Approvals

Reports published since the bank's last meeting support Steven's view that the economy is slowing. Employment fell in May for the first time in 18 months, ending the longest run of monthly job gains since 1978, consumer confidence dropped in June and businesses remained pessimistic for a fifth consecutive month.

Home-building approvals probably fell 3.4 percent in May, the fourth decline this year, according to the median estimate of 24 economists surveyed by Bloomberg. A separate report may show retail sales rose 0.1 percent. The housing and retail sales figures will be published on July 2.

Consumer and investor sentiment is also being battered by crude oil prices, which hit a record $142.99 a barrel last week, and tumbling stock markets.

Australia's benchmark S&P/ASX 200 Index has slumped 16 percent this year, and the Dow Jones Industrial Average had its worst June since the Great Depression.

“The Reserve Bank can be a little more confident'' that this year's interest-rate increases are working, said Matthew Johnson, an economist at ICAP Australia Ltd. in Sydney. “They know inflation is going to be high for a while, but their emphasis will be making sure this growth slowdown sticks.''

Bloomberg Survey

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Total personal income grew faster in New York during the first quarter of 2008 than anywhere else in the Northeast, according to a new report from the U.S. Bureau of Economic Analysis.

New York’s total personal income (TPI) equaled $950.8 billion in the first quarter, which was up 2.5 percent from the fourth quarter figure of $927.4 billion.

No other Northeastern state experienced income growth of more than 1.4 percent. New York, in fact, outperformed all other states but North Dakota and South Dakota. The former led the nation with a TPI increase of 7.6 percent between the fourth quarter of 2007 and first quarter of 2008.

TPI is the measure of all money earned by all residents of a state during a given year. It covers wages, interest, dividends, rental receipts and Social Security payments, among other sources.

Wall Street was largely responsible for New York’s sharp rise in TPI pay day loan.

"Sizable performance bonuses for 2007 in the finance industry accounted for New York’s strong personal income growth, more than double national nonfarm growth," said the Bureau of Economic Analysis report. "Because many of the recipients of the bonuses live in Connecticut and New Jersey, personal income of those states was boosted slightly as well."

The large rises in the Dakotas were caused by strong upswings in prices for grain, especially corn.

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Japan's economy may slow as cooling export growth prompts companies to cut output, the government's broadest outlook indicator showed.

The leading index, derived from 12 statistics including production and stock prices, fell to 20 percent in March from 54.5 the previous month, signaling growth will slow over the next two quarters, the Cabinet Office said today in Tokyo. The index has been below 50 in nine of the past 12 months.

Cooling demand for Japanese goods overseas prompted companies to cut production at the fastest pace in five years in March. Toyota Motor Corp., the world's second-largest automaker, yesterday posted its first quarterly profit drop in almost three years because of a stronger yen and a U.S. sales slump.

“Production is increasingly becoming a cause of concern for Japan's economy,'' said Junko Nishioka, a senior economist at ABN Amro Securities in Tokyo. “We're going to enter a slowdown as the U.S. slowdown hurts foreign demand.''

Slumps in output have coincided with Japan's three recessions since 1991.

Sentiment among the country's largest manufacturers fell to its lowest level in four years in March as higher oil prices and the yen's 8 percent gain against the dollar this year ate into profits http://abc-cashadvance.com.

“Japan is at a crucial point in terms of whether it will fall into a recession or not,'' Yoshiki Shinke, a senior economist at Dai-Ichi Life Research Institute in Tokyo. “How much exports will slow because of a U.S. slowdown and how much that will affect factory output is key.''

Bearing the Burden

Crude oil touched a record $124.61 yesterday, indicating companies and consumers will have to keep bearing the burden of higher energy costs in coming months. Japan's regular gasoline prices set a record high this week, according to the Oil Information Center.

Consumer spending, which accounts for more than a half of the economy, is unlikely to spur economic growth and compensate for the manufacturing slump because higher energy costs are discouraging spending.

The coincident index fell to 33.3 percent in March from 70 in February, today's report showed.

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The Oregon Public Utility Commission on Tuesday reduced electric rates by roughly 6 percent for Portland General Electric's residential and small-farm customers.

The adjustment, which will take effect April 15, will drop the bill of the average residential customer roughly $5.80 per month, according to a news release from the commission.

The rate relief comes on the behalf of regional power wholesaler Bonneville Power Administration.

BPA in February unveiled a plan to reduce the rates it charges regional utilities such as PGE (NYSE: POR) http://us-no-fax-payday-loans.com. The proposal was a response to a U.S. Court of Appeals decision last May that said BPA had erred in its distribution of cheap power from the region's 31 federal hydroelectric dams.

"We will continue to make a case for Oregon to equitably share the benefits of the low-cost federal hydro system," Commission Chairman Lee Beyer said in a news release. "In the meantime, we are pleased to be able to reduce rates at this time."

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China has room to increase interest rates and banks' reserve requirements to cool the world's fastest-growing major economy, central bank Governor Zhou Xiaochuan said today.

“There is room for all monetary policy'' tools, including rates and reserve ratios, Zhou told reporters at the annual meeting of the nation's legislature in Beijing today. He made the same comment about rates 10 days ago.

Six increases in deposit and lending rates last year and record reserve requirements for banks have failed to prevent inflation from accelerating to an 11-year high. Raising rates may attract overseas money into an economy already flooded with cash.

“Inflation remains the central bank's biggest concern this year,'' said Wang Yuanhong, an economist with the State Information Center.

The key one-year lending rate is at a nine-year high of 7.47 percent. The deposit rate is 4.14 percent, less than half the 8.7 percent pace of inflation in February. Banks are required to set aside 15 percent of deposits as reserves.

While inflation accelerated last month on food costs and supply disruptions caused by blizzards, the trade surplus narrowed, the value of new loans dropped from the previous month and growth in money supply slowed.

Festival, Snowstorms

It's “too early'' to say monetary policy has succeeded in cooling credit and money-supply growth, Zhou said payday advance online.

Some economic data “improved a bit'' in February “but there were special factors such as the Spring Festival and the snow disaster,'' he said, without elaborating.

Loan growth may top a government target for the first quarter of this year, Wu Xiaoling, a former vice governor of the People's Bank of China, said today.

“We still have one month to watch lending growth for the first quarter,'' she said, without specifying the target.

Lending limits won't be relaxed because of the rebuilding required after the blizzards that swept across parts of the country in January and February, Wu said.

The central bank wants no more than 35 percent of this year's new loans to be made in the first quarter, the state-run Shanghai Securities News reported Dec. 21. This year's lending growth will be capped at 15 percent, the newspaper said.

Premier Wen Jiabao said March 5 that the government needs a “tight'' monetary policy and to do more this year to curb lending growth and price gains.

Small rural lenders may face “ liquidity difficulties and even payment risk'' this year because of government measures to slow loan growth, China Banking Regulatory Commission Vice Chairman Jiang Dingzhi said Feb. 26.

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The index of leading U.S. economic indicators probably fell in January for the fourth consecutive month, as deterioration in the stock and housing markets signaled weakening growth, a survey of economists showed before a report today.

The Conference Board's gauge slid 0.1 percent, after falling 0.2 percent in December, according to the median estimate in a Bloomberg News survey of 54 economists. The measure points to the direction of the economy over the next three to six months.

The worst housing slump in a quarter century, a cooling job market and shrinking credit have taken a toll on consumer spending and raised the risk of a recession. Federal Reserve policy makers are prepared to cut interest rates further to preserve growth, Chairman Ben S. Bernanke told lawmakers last week.

“The economy is definitely very weak,'' said Aaron Smith, senior economist at Moody's Economy.com in West Chester, Pennsylvania. “We still have a big drag from homebuilding, and the consumer is tapped out. Our forecast calls for a mild recession.''

The Conference Board, a New York-based research group, will release its report at 10 a.m. Estimates ranged from a decline of 0.3 percent to a gain of 0.2 percent.

Index Components

Seven of the 10 economic indicators that make up the index are known ahead of time: stock prices, jobless claims, building permits, consumer expectations, the yield curve, supplier delivery times and factory hours.

The Conference Board estimates the remaining three — new orders for consumer goods, the yield curve and money supply. The report may show more components weighed on the leading indicators index in January than gave it a boost.

“The outlook for the economy has worsened in recent months, and the downside risks to growth have increased,'' Bernanke told the Senate Banking Committee on Feb. 14. Later that day, former Fed Chairman Alan Greenspan said in a speech in Houston that the economy is “clearly on the edge'' of a recession.

Fed policy makers said “relatively low'' interest rates may be needed for some time as they cut their growth forecast and voted for the fastest easing of monetary policy in two decades, according to minutes of the Fed's January conference calls and meeting released yesterday savings account payday advance. The economy will expand 1.3 percent to 2 percent in the fourth quarter from the same period a year before, Fed officials forecast. In October, they predicted growth of 1.8 percent to 2.5 percent.

One drag to the leading index came from the Standard & Poor's 500 index, which averaged 1379 in January, down from 1479 the prior month. The S&P gauge has fallen three consecutive months, the longest losing streak since 2003.

Building permits, a sign of future construction, also weighed the index down. Permits fell 3 percent to a 1.048 million annual rate in January, the Commerce Department reported yesterday. Housing starts remained near the lowest level since 1991.

Some of the factors that contributed to the leading measure have worsened recently. The Reuters/University of Michigan consumer expectations index, which economists view as a proxy for future spending, rose in January from December, though the latest figures show the gauge fell in February to the lowest since 1992.

First-time applications for jobless benefits dropped to a weekly average of 326,500 in January from 343,300 the prior month, adding to the leading index. Still, the U.S. lost jobs in January for the first time in four years, raising concern that a pillar of support for consumer spending is weakening.

The Labor Department may report today at 8:30 a.m. that first-time unemployment claims rose by 1,000 to 349,000 last week, a level consistent with a slowing labor market, according to the median estimate of economists in a Bloomberg survey.

Americans already are showing reluctance to spend. Best Buy Co., the largest U.S. consumer-electronics chain, on Feb. 15 cut its full-year profit forecast on lower sales of digital cameras, video games and home theaters.

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