Global job woes deepened on Wednesday as Germany reported its first rise in unemployment in almost three years and a U.S. labour survey pointed to bigger-than-expected losses for December.
British retailer Marks & Spencer said it too would have to let workers go, a day after U.S. aluminium giant Alcoa announced weakened global demand would force it to slash more than 15,000 jobs.
German unemployment rose in December for the first time since February 2006, bringing to an end a three-year labour market boom as the global financial crisis hits companies in Europe's largest economy.
Up by a bigger-than-expected 18,000 in seasonally adjusted terms, the jobless figures come as German lawmakers work on a second stimulus package expected next week that could total 50 billion euros ($67 billion).
"How steep the rise in unemployment will be hinges largely on what the government agrees to do in its second stimulus package," said Joerg Lueschow, economist at WestLB.
Germany's ruling coalition is also discussing support measures worth up to 100 billion euros for firms in financial trouble, the Financial Times Deutschland newspaper reported.
A report by ADP Employer Services said U.S. private employers shed 693,000 jobs in December, up sharply from the revised 476,000 jobs lost in November and far more than economists estimated.
The figures suggest the U.S. government's more comprehensive non-farm payrolls report due on Friday will show a loss of about 670,000 jobs, said Joel Prakken, chairman of Macroeconomic Advisers, which jointly developed the report.
The employment numbers had been expected to show half a million jobs were lost in December, pushing the 2008 total above 2.4 million.
Alcoa said late on Tuesday it would reduce its headcount by more than 13,500, eliminate 1,700 contractors and slash aluminium output by 18 percent.
Marks & Spencer said more than 1,200 jobs would go after quarterly sales fell 7.1 percent at the 125-year-old clothing, food and homewares group.
"We expect challenging economic conditions to continue for at least the next 12 months," said Chairman Stuart Rose.
RATE CUTS EYED
Euro zone producer prices released on Wednesday showed a record monthly fall in November on a sharp drop in energy costs, firming the case for a deep European Central Bank (ECB) interest rate cut next week.
Prices at factory gates in the 15 countries using the euro currency fell 1.9 percent month-on-month in their biggest fall since Eurostat's PPI records began in 1981.
"Given widespread evidence of sharply diminishing inflationary pressures and deepening euro zone recession, we believe there is a compelling case for the ECB to cut interest rates appreciably … at its 15 January policy meeting," said Howard Archer, economist at IHS Global Insight.
The Bank of England is also expected to cut rates by 50 basis points to a record low of 1.5 percent on Thursday, according to economists polled by Reuters.
Both Indonesia and Taiwan announced interest rate cuts on Wednesday, while in Thailand the new government said it would retain most of the short-term stimulus measures of a previous administration.
Taiwan's emergency rate cut followed a 42 percent plunge in December exports.
Japanese shares sustained a New Year's rally by ending up 1.7 percent, while European stocks traded lower. The FTSEurofirst 300 index of top European companies was down 1.22 percent at 1458 GMT.
Japan is looking at injecting money into 40 or more regional banks, Tokyo's Mainichi newspaper reported, though an official at Japan's Financial Services Agency said no broad injection of public funds was under consideration.
Adding to Europe's gloom was a dispute between Russia and Ukraine which reduced Russian natural gas supplies for homes and factories in south-east Europe.
