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A look at economic developments and activity in major stock markets around the world Thursday:

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FRANKFURT, Germany ? A raft of downbeat indicators stoked fears that Europe is on the edge of recession as it grapples with a crippling debt crisis.

The European Commission's index of consumer optimism from the European Commission fell to a two-year low of minus 18.5 in September in the 17 countries that use the euro. Meanwhile industrial orders ? key for Europe's manufacturing driven economy ? slid 2.1 percent in July, according to Eurostat, the EU's statistics office.

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LONDON ? Mounting evidence that the world economy is slowing down sharply sent global stock markets spiraling down as investors brushed off the U.S. Federal Reserve's efforts to spur growth and focused instead on the central bank's gloomy outlook.

France's CAC-40 was down a hefty 5.3 percent while Germany's DAX slid 5 percent. The FTSE index of Britain's leading shares ended down 4.7 percent.

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TOKYO ? In Asia, Japan's Nikkei 225 dropped 2.1 percent. South Korea's Kospi slid 2.9 percent. Australia's S&P/ASX 200 was 2.6 percent down.

Hong Kong's Hang Seng saw the biggest fall, diving over 900 points, or 4.9 percent.

In mainland China, the Shanghai Composite Index closed down 2.8 percent.

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FRANKFURT, Germany ? The departing chief economist of the European Central Bank warned that heavy government debts threatened the existence of the euro currency, and urged the EU to take much tougher steps to force overspending governments back into line.

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ATHENS, Greece ? Austerity-weary Greeks lashed out against more tax hikes and pension cuts with a new round of strikes, with public transport workers, taxi drivers, teachers and air traffic controllers walking off the job.

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MADRID ? Spain's Parliament restored a deficit-reducing wealth tax in its final session before dissolving to make way for an election that opposition conservatives are favored to win.

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TAIPEI, Taiwan ? Taiwan and Japan signed an arrangement to bolster mutual investment despite their lack of formal diplomatic ties.

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BRASILIA ? Brazil's government statistics agency says the unemployment rate in Latin America's biggest economy was 6 percent in August. That's unchanged from the previous month, but the lowest figure for a month of August since 2002.

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DUBLIN ? Ireland's economy has grown 1.6 percent in the second quarter, more than expected, and appears on course to exit a three-year recession.

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PARIS ? The top tier of luxury consumers curbed their spending on high-end clothes, accessories and jewelry in the first half of 2011, while regular consumers picked up the slack for the first time since the 2008 financial crisis, a study by American Express' consulting unit said.

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The Fed's decision to buy long-term Treasurys and sell short-term ones to help get the economy back on its feet was expected. Stocks sank anyway on fears the Fed's statement showed economy was in dire shape.

The Dow Jones industrial average lost 283.82 points, or 2.5 percent, and closed at 11,124.84.

The Standard & Poor's 500 index fell 35.33, or 2.9 percent, to 1,166.76.

The Nasdaq composite fell 22.59, or 0.9 percent, to 2,590.24.

The Nasdaq composite fell 52.05, or 2 percent, to 2,538.19.

For the week to date:

The Dow is down 384.25, or 3.3 percent.

The S&P 500 is down 49.25, or 4.1 percent.

The Nasdaq is down 84.12 or 3.2 percent.

For the year to date:

The Dow is down 452.67, or 3.9 percent.

The S&P 500 is down 90.88, or 7.2 percent.

The Nasdaq is down 114.68, or 4.3 percent.

WASHINGTON ? The head of the International Monetary Fund says the global economy has entered a dangerous phase and that heavy debt burdens could "suffocate" a recovery.

Nations must work together to meet the growing risks, IMF Managing Director Christine Lagarde said Thursday. Banks must provide more capital, and governments need credible plans to get their debt under control.

Lagarde worries that some governments lack the political will to shrink rising deficits. That appeared to be a shot at the United States, where Congress has struggled to reach agreement on a deficit-reduction plan.

"The current economic situation is entering a dangerous phase," said Lagarde at a news conference kicking off the annual meetings of the 187-nation International Monetary Fund and its sister lending organization, the World Bank.

Lagarde says nations will make progress this week during the annual meetings and that they will ultimately meet the challenges ahead.

The gathering of world finance leaders comes at a perilous time for the global economy. World markets are plunging on fears that the U.S. economy has weakened and is adding few jobs, while Europe is confronted by a deepening debt crisis.

The Dow Jones industrial average fell more than 400 points at one point Thursday.

"I still think a double-dip recession for the world's major economies is unlikely, but my confidence in that belief is being eroded daily," World Bank President Robert Zoellick said Thursday, warning that the world remained in a "danger zone."

Earlier this week, the IMF slashed its growth forecasts for this year and next. And in a separate report, the IMF said the global financial system is facing its greatest challenges since the 2008 financial crisis.

Europe's troubles center on Greece. The Mediterranean nation could default on its debt next month unless it receives a $10.9 billion installment from a bailout fund managed by the European Central Bank, the European Commission and the IMF.

A default by Greece could destabilize other financially troubled European countries, such as Portugal, Ireland, Spain and Italy. It would also deal a blow to many European banks, which are large holders of Greek government bonds.

Treasury Secretary Timothy Geithner said Thursday that the United States has a huge stake in seeing Europe succeed. He said European governments would "act with more force" to resolve its debt crisis in the coming weeks.

He also said that the IMF had adequate resources to help in the European debt crisis. The IMF is already providing support to a bailout package for Greece.

Olli Rehn, the European Union's top economic official, said the 16 other euro zone countries won't abandon Greece and allow it to default on its massive debts.

"An uncontrolled default or exit of Greece from the euro zone would cause enormous economic and social damage, not only to Greece but to the European Union" and the rest of the world, Rehn said.

The U.S. economy appears to be slightly more stable than Europe. Still, more than two years after the recession officially ended, it is barely growing. Consumer and business confidence is low. In August, employers added no net jobs, and consumers didn't increase their spending on retail goods.

On Wednesday, the Fed said it will try to push long-term interest rates lower and make consumer and business loans cheaper by shifting $400 billion out of short-term Treasury securities and into longer-term bonds. Economists, however, doubt the plan will do much, and stocks plunged after the decision was announced.

President Barack Obama has proposed a $447 billion job-creation package. But the president's lacks support in Congress. Republicans strongly oppose his proposal to pay for it with higher taxes on wealthier households, hedge fund managers and oil companies.

A look at economic developments and activity in major stock markets around the world Thursday:

___

FRANKFURT, Germany ? A raft of downbeat indicators stoked fears that Europe is on the edge of recession as it grapples with a crippling debt crisis.

The European Commission's index of consumer optimism from the European Commission fell to a two-year low of minus 18.5 in September in the 17 countries that use the euro. Meanwhile industrial orders ? key for Europe's manufacturing driven economy ? slid 2.1 percent in July, according to Eurostat, the EU's statistics office.

___

LONDON ? Mounting evidence that the world economy is slowing down sharply sent global stock markets spiraling down as investors brushed off the U.S. Federal Reserve's efforts to spur growth and focused instead on the central bank's gloomy outlook.

France's CAC-40 was down a hefty 5.3 percent while Germany's DAX slid 5 percent. The FTSE index of Britain's leading shares ended down 4.7 percent.

___

TOKYO ? In Asia, Japan's Nikkei 225 dropped 2.1 percent. South Korea's Kospi slid 2.9 percent. Australia's S&P/ASX 200 was 2.6 percent down.

Hong Kong's Hang Seng saw the biggest fall, diving over 900 points, or 4.9 percent.

In mainland China, the Shanghai Composite Index closed down 2.8 percent.

___

FRANKFURT, Germany ? The departing chief economist of the European Central Bank warned that heavy government debts threatened the existence of the euro currency, and urged the EU to take much tougher steps to force overspending governments back into line.

___

ATHENS, Greece ? Austerity-weary Greeks lashed out against more tax hikes and pension cuts with a new round of strikes, with public transport workers, taxi drivers, teachers and air traffic controllers walking off the job.

___

MADRID ? Spain's Parliament restored a deficit-reducing wealth tax in its final session before dissolving to make way for an election that opposition conservatives are favored to win.

___

TAIPEI, Taiwan ? Taiwan and Japan signed an arrangement to bolster mutual investment despite their lack of formal diplomatic ties.

___

BRASILIA ? Brazil's government statistics agency says the unemployment rate in Latin America's biggest economy was 6 percent in August. That's unchanged from the previous month, but the lowest figure for a month of August since 2002.

___

DUBLIN ? Ireland's economy has grown 1.6 percent in the second quarter, more than expected, and appears on course to exit a three-year recession.

___

PARIS ? The top tier of luxury consumers curbed their spending on high-end clothes, accessories and jewelry in the first half of 2011, while regular consumers picked up the slack for the first time since the 2008 financial crisis, a study by American Express' consulting unit said.

___

PITTSBURGH, Jan. 21 (UPI) -- A high-tech baby stroller complete with power generator and push-button folding is on its way, 4moms, a Pittsburgh brand of Thorley Industries, said.

This baby does it all -- the stroller that is -- the Los Angeles Times reported Saturday.

It tracks mileage, temperature and speed, has power folding and unfolding and a headlight.

It costs $849 -- not so bad when considering some of the competition costs that much and more -- and they don't have a sensor that tells you whether or not there's actually a baby on board.

That might be confusing, given the Origami stroller, as it is called, weighs 32 pounds, most of that dedicated to the generator that creates the power for the rig when it is pushed.

Should the batteries become depleted, no worries: it can be manually folded and unfolded, as well.

Mr Posen, a member of the Bank's nine-strong Monetary Policy Committee, added that banks were making "excuses" for their failure to lend to small businesses, suggesting the real reason might be that they are "reluctant, risk-averse jerks".

Speaking to Sky News, he said: "We, the British taxpayer, but also the British government as a regulator, is not getting value for money because the role of banks ... is to provide credit for growth of the real economy in the UK and they are not doing the job.

"When banks say it's all about no demand [for loans], that's crazy," he told BBC Radio's Wake up to Money. "Fees, prices and spreads on loans going to small businesses are going up, and normally prices don't go up when demand is falling."

He added that banks were using new capital and gearing requirements as an excuse to limit lending. "They are not being forced to build up capital and cut back their balance sheets as much as they claim... It's an excuse, it's not a reality," he said.

To explain their behaviour, he wondered whether bankers were "reluctant, risk-averse jerks" or if there was a more fundamental problem.

He claimed banks were choosing to roll over loans to big businesses rather than make new loans to smaller firms and stressed that the problem was particularly acute in the UK due to the lack of alternative funding for small businesses. He urged the Government to press ahead quickly with its credit easing programme to get £20bn into the sector.

"Back in October we heard Vince Cable and the Chancellor talk about credit easing to their party conferences ... but we haven't seen the structural changes to go with it," Mr Posen said.

He also hinted that he will be voting for more money printing next week when the MPC meets to decide on interest rates and quantitative easing (QE). "I'm certainly leaning toward doing more QE if we don't change the forecast," he told Bloomberg Television. He added: "£75bn was a good slug last time and there's a case to do it again."

Mr Posen voted to increase QE for a year before the other MPC members joined him in October. The Bank is expected to top up the £75bn second round with another £50bn-£75bn next week. The first round of QE totalled £200bn.

He added that he was "slightly more optimistic than I was a few months ago" despite the ongoing eurozone crisis.

WASHINGTON/FRANKFURT (Reuters) ? Seven world leaders on Thursday demanded Europe act more decisively to quell its debt crisis and a European Central Bank study warned that the entire euro currency project was now in peril.

As the world's top finance chiefs gathered for talks in Washington, an open letter by the leaders of Australia, Canada, Indonesia, Britain, Mexico, South Africa and South Korea stressed the risk of the euro zone crisis spreading worldwide.

"Euro zone governments and institutions must act swiftly to resolve the euro crisis and all European economies must confront the debt overhang to prevent contagion to the wider global economy," the leaders wrote in the letter to France, currently chair of the Group of 20 leading economies.

As stock prices around the world fell on fears of a new economic slump, U.S. Treasury Secretary Timothy Geithner stepped up his warnings to Europe to act quickly to stem the crisis and provide enough resources to prevent a Greek default. But he expressed faith Europe would act.

"They recognize that if you let, as the United States did in the early part of 2008, the momentum of these concerns build, they're very hard to arrest, much more expensive to arrest," Geithner told a forum in Washington. "So you're going to see them act with more force in the coming weeks and months."

Finance ministers from the G20 leading developed and emerging economies will meet for dinner in Washington on Thursday to discuss the crisis, but they have no plans to issue a communique to outline a response.

That may be disappoint investors already alarmed about the inability of policymakers to come together to tackle the world's economic problems as they did to fight the financial crisis of 2007-09.

World stocks plunged on Thursday as investors fretted over the grim global growth outlook including data pointing to a slowdown in China, one of the world's key economic engines.

European stocks fell around 4.5 percent and the Dow Jones Industrials were down nearly 4 percent.

Investors flooded into the safe haven of U.S. Treasury debt pushing yields to new lows a day after the Federal Reserve announced a plan to shift its balance sheet to longer-dated paper to keep lending rates low and bolster the U.S. economy.

The European Union's monetary affairs commissioner, Olli Rehn, vowed that European leaders would not allow an uncontrolled Greek default, nor would the country leave the euro zone.

Rehn did not rule out the possibility of a Greek debt restructuring, but said this would be difficult to do in an "orderly" way.

In Athens, Prime Minister George Papandreou said further austerity measures were vital to Greece, even as workers striking in protest shut down the country's transport system.

"There is no other path. The other path is bankruptcy, which would have heavy consequences for every household," he said after a meeting in parliament with deputies from his ruling Socialist party.

ECB WARNS EURO IN DANGER

The ECB study was a parting shot from ECB chief economist Juergen Stark, who resigned this month after opposing the bank's policy of buying troubled countries' bonds. It was perhaps the most strongly-worded warning about the future of the euro from a central banker.

"Greatly increased fiscal imbalances in the euro area as a whole and the dire situation in individual member countries risk undermining stability, growth and employment, as well as the sustainability of (Europe's Economic and Monetary Union) itself," said the research paper, which was published by the ECB but not endorsed by it.

The study co-authored by Stark recommended euro zone countries face tough new debt rules, have their deficits approved at a European level and if they reneged, face automatic fines.

The European Union's new super-watchdog, the European Systemic Risk Board, warned that the knock-on effects of the debt crisis that began in Greece in 2009 had led to considerably higher risks of financial instability in Europe.

"The high inter-connectedness in the EU financial system has led to a rapidly rising risk of significant contagion. This threatens financial stability in the EU as a whole and adversely impacts the real economy in Europe and beyond."

The board, chaired by ECB President Jean-Claude Trichet, called for "decisive and swift action" from policymakers, widely seen as being slow in the fight to contain the crisis.

The IMF has pressed for a recapitalization of European banks -- and has faced some opposition from bank executives and EU governments who have argued balance sheets in the region are sound.

Canadian Finance Minister Jim Flaherty also joined the chorus of non-European officials warning that a new global credit crunch could bite if Europe failed to act quickly.

Flaherty told the Canadian Broadcasting Corp that European nations could "get ahead of the game" if they were prepared to increase the euro zone's bailout funds to 1 trillion euros from 440 billion euros.

BANKS IN FOCUS

The crisis has raised pressure on European banks, and particularly French lenders, which are heavily exposed to Greece and other troubled euro zone sovereigns.

France's biggest bank, BNP Paribas denied a Reuters report that it was in talks with the Gulf state of Qatar on taking a stake in the bank.

French finance Minister Francois Baroin told reporters in Washington that any liquidity problems for euro zone banks were addressed by global central bank efforts to set up new liquidity facilities last week.

He said the euro zone's top priority is "reducing deficits as quickly as possible." Leveraging Europe's bailout fund could be achieved at a later date to "give it more systemic firepower."

(Additional reporting by David Ljunggren in Ottawa, Regan Doherty in Qatar, Daniel Flynn Jan Strupczewski, Rachelle Younglai and Lesley Wroughton in Washington, Lionel Laurent and Julien Ponthus in Paris, Ross Finley in London, Lefteris Papadimas in Athens, Martin Santa in Frankfurt; Writing by Paul Taylor and David Lawder; Editing by Andrea Ricci)

President Obama at the State of the Union.

NEW YORK (CNNMoney) -- The January jobs report contains a slew of numbers that are likely to put a twinkle in the eye of Obama campaign staffers.

The unemployment rate dropped to 8.3%, the lowest it's been since February 2009. The private sector added jobs for the 23rd straight month. And about a million more people say they have jobs now than in October, which is the biggest 3-month change since before the recession.

The jobs report -- which surprised economists -- is great news for Obama. The unemployment rate plays an important role in campaign rhetoric, and the closer it drops to 7.8% -- the rate when Obama took office in January 2009 -- the better it is for the White House.

But even if the unemployment rate gets back to 7.8%, that might not be enough to save Obama's job. No president since Franklin D. Roosevelt has won re-election with an unemployment rate over 7.2%.

Of course that's just one data point. Still, there are plenty of reasons for the White House to keep the champagne on ice.

The Congressional Budget Office released forecasts earlier this week that project the unemployment rate will average 8.8% this year.

"Although conditions in the labor market have improved somewhat in recent months, considerable slack remains, largely as a consequence of the continued weakness in the demand for goods and services," the CBO said.

And the Federal Reserve last week said it forecasts the unemployment rate to remain between 8.2% and 8.5% in 2012. Fed chairman Ben Bernanke continues to characterize the recovery as "frustratingly slow."

Still, Alan Krueger, chairman of the White House's Council of Economic Advisers, said in a statement that the jobs report "provides further evidence that the economy is continuing to heal."

Naturally, not everyone agrees.

Mitt Romney, one of the Republicans most likely to challenge Obama in the fall, was not so rosy, saying in a statement that "these numbers cannot hide the fact that President Obama's policies have prevented a true economic recovery. We can do better."

Experts say it would be a mistake to put too much emphasis on the unemployment rate. A more useful predictor of electoral success is how Americans feel about the economy.

And there, the news isn't so good for the White House.

According to an NBC News/Wall Street Journal poll conducted late last month, only 45% of Americans approve of the way Obama is handling the economy, while 50% disapprove.

Another factor to consider: The road to the White House goes through a select number of swing states.

Voters in hard-hit states like Michigan, Nevada, Virginia, Florida, Ohio and Indiana will decide the election.

In general, the job market has a long way to go to fully recover from the financial crisis. The economy still needs to add about 5.6 million jobs to get back to 2008 employment levels.  

First Published: February 3, 2012: 11:04 AM ET

Christopher S. Rugaber, AP Economics Writer, On Saturday November 5, 2011, 11:13 am EDT

WASHINGTON (AP) -- The jobs crisis has left so many people out of work for so long that most of America's unemployed are no longer receiving unemployment benefits.

Early last year, 75 percent were receiving checks. The figure is now 48 percent -- a shift that points to a growing crisis of long-term unemployment. Nearly one-third of America's 14 million unemployed have had no job for a year or more.

Congress is expected to decide by year's end whether to continue providing emergency unemployment benefits for up to 99 weeks in the hardest-hit states. If the emergency benefits expire, the proportion of the unemployed receiving aid would fall further.

The ranks of the poor would also rise. The Census Bureau says unemployment benefits kept 3.2 million people from slipping into poverty last year. It defines poverty as annual income below $22,314 for a family of four.

Yet for a growing share of the unemployed, a vote in Congress to extend the benefits to 99 weeks is irrelevant. They've had no job for more than 99 weeks. They're no longer eligible for benefits.

Their options include food stamps or other social programs. Nearly 46 million people received food stamps in August, a record total. That figure could grow as more people lose unemployment benefits.

So could the government's disability rolls. Applications for the disability insurance program have jumped about 50 percent since 2007.

"There's going to be increased hardship," said Wayne Vroman, an economist at the Urban Institute.

The number of unemployed has been roughly stable this year. Yet the number receiving benefits has plunged 30 percent.

Government unemployment benefits weren't designed to sustain people for long stretches without work. They usually don't have to. In the recoveries from the previous three recessions, the longest average duration of unemployment was 21 weeks, in July 1983.

By contrast, in the wake of the Great Recession, the figure reached 41 weeks in September. That's the longest on records dating to 1948. The figure is now 39 weeks.

"It was a good safety net for a shorter recession," said Carl Van Horn, an economist at Rutgers University. It assumes "the economy will experience short interruptions and then go back to normal."

Weekly unemployment checks average about $300 nationwide. If the extended benefits aren't renewed, growth could slow by up to a half-percentage point next year, economists say.

The Congressional Budget Office has estimated that each $1 spent on unemployment benefits generates up to $1.90 in economic growth. The CBO has found that the program is the most effective government policy for increasing growth among 11 options it's analyzed.

Jon Polis lives in East Greenwich, R.I., one of the 20 states where 99 weeks of benefits are available. He used them all up after losing his job as a warehouse worker in 2008. His benefits paid for groceries, car maintenance and health insurance.

Now, Polis, 55, receives disability insurance payments, food stamps and lives in government-subsidized housing. He's been unable to find work because employers in his field want computer skills he doesn't have.

"Employers are crying that they can't find qualified help," he said. But the ones he interviewed with "weren't willing to train anybody."

From late 2007, when the recession began, to early 2010, the number of people receiving unemployment benefits rose more than four-fold, to 11.5 million.

But the economy has remained so weak that an analysis of long-term unemployment data suggests that about 2 million people have used up 99 weeks of checks and still can't find work.

Contributing to the smaller share of the unemployed who are receiving benefits: Some of them are college graduates or others seeking jobs for the first time. They aren't eligible. Only those who have lost a job through no fault of their own qualify.

The proportion of the unemployed receiving benefits usually falls below 50 percent during an economic recovery. Many have either quit jobs or are new to the job market and don't qualify.

Today, the proportion is falling for a very different reason: Jobs remain scarce. So more of the unemployed are exhausting their benefits.

Federal Reserve Chairman Ben Bernanke has noted that the long-term unemployed increasingly find it hard to find work as their skills and professional networks erode. In a speech last month, Bernanke called long-term unemployment a "national crisis" that should be a top priority for Congress.

Lawmakers will have to decide whether to continue the extended benefits by the end of this year. If the program ends, nearly 2.2 million people will be cut off by February.

Congress has extended the program nine times. But it might balk at the $45 billion cost. It will be the first time the Republican-led House will vote on the issue.

WASHINGTON ? Fixed mortgage rates hovered at record lows for a third straight week. They are likely to fall even further now that the Federal Reserve said it would shuffle its holdings to drive down long-term interest rates.

The average rate on the 30-year fixed mortgage was unchanged at 4.09 percent this week, Freddie Mac said Thursday. That's the lowest rate seen since 1951.

The average rate on the 15-year mortgage ticked down to 3.29 percent. Economists say that's the lowest rate ever for the loan.

Mortgage rates tend to track the yield on the 10-year Treasury note. One day after the Fed's announcement, the yield on the 10-year note touched 1.74 percent Thursday. That's the lowest level since Federal Reserve Bank of St. Louis started keeping daily records in 1962.

In July, the yield on the 10-year note was above 3 percent.

Low mortgage rates have done little to boost home sales. This year is shaping up to be the worst for sales of previously occupied homes since 1997. Few are buying, even though the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks this year.

Many Americans are in no position to buy or refinance. High unemployment, scant wage gains and large debt loads have kept them away.

Others can't qualify. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers. Some homeowners have too little equity invested in their homes to meet loan requirements.

Most people must also pay extra fees to get the low mortgage rates. Those fees are known as points, with one point equaling 1 percent of the total loan amount.

The average fees for the 30-year held steady at 0.7 point. Fees paid on 15-year fixed loans and both 5-year and one-year adjustable-rate loans were all at 0.6 point.

Once fees are factored in, the average rate on the 30-year loan rises to 4.25 percent, Freddie Mac said.

A drop in mortgage rates could provide some help to the economy if more people could refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.

But many homeowners with good jobs and stable finances have already refinanced in the past year. The average rate on the 30-year fixed loan fell to 4.17 percent last November, and to 4.15 percent last month. Both were previous lows.

Homeowners typically pay a few thousand dollars in closing costs when they refinance. To refinance again, most experts say rates would need to fall an additional 1 percentage point to make it worthwhile.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rate on a five-year adjustable-rate mortgage rose to 3.02 percent. That's higher than last week's 2.99 percent.

The average rate for the one-year adjustable-rate mortgage increased slightly to 2.82 percent from 2.81 percent, the lowest rate on records going back to 1984.