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Dec. 16, 2011 at 1:10 PM
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Markets up on mild inflation data

NEW YORK, Dec. 16 (UPI) -- U.S. markets turned modestly higher Friday morning on news inflation remained mild in November.

Core consumer prices rose 2.2 percent on an annual basis, one tick higher than October, but within sight of the U.S. Federal Reserve's target of 2 percent.

In early afternoon trading on Wall Street, the Dow Jones industrial average added 69.36 points or 0.58 percent to 11,938.17. The Standard & Poor's 500 index gained 11.45 points or 0.94 percent to 1,227.20. The Nasdaq composite index tacked on 35.50 points or 1.4 percent to 2,576.51.

The benchmark 10-year treasury note rose 10/32 to yield 1.88 percent.

The euro rose to $1.3039 from Thursday's $1.3015. Against the yen, the dollar fell to 77.71 yen from Thursday's 77.85 yen.

The Nikkei 225 index in Tokyo gained 0.29 percent, 24.35, to 8,401.72.

Two big Canadian unions talk merging

OTTAWA, Dec. 16 (UPI) -- The Canadian Auto Workers union and the Communications, Energy and Paperworkers union said they are beginning discussions about merging.

"There's a lot of work left to do," CAW president Ken Lewenza said Thursday. "We're moving along but we're still at a preliminary stage and far off from a deal."

Talks of merging come amidst increased worry over the waning influence of unions while corporations and the government hold more power, the Toronto Star reported.

Along with loss of power, the two unions are trying to find a better way to represent workers as membership levels stay flat or fall.

"We're trying to figure out how the labor movement is going to look in five years and how do we strengthen the commitment to our members," Lewenza said.

Experts say the new union could be the largest merger in Canadian history: The CAW represents 200,000 workers and CEP has 125,000 members.

"This would certainly be the largest among mergers in the private sector," said Robert Hickey, an assistant professor of industrial relations at Queen's University in Kingston, Ontario.

CEP President Dave Coles said the conservative government of Prime Minister Stephen Harper is implementing policies that are weakening social benefits and favor corporations over workers.

"They're leading us in a direction that I believe Canadians don't want to go and we're trying to use our economic clout through things like mergers to influence policy," Coles said.

About the merger, Coles said: "I think it would be a good fit. We're both Canadian unions with representation in many sectors."

IMF head: World faces 1930-type Depression

WASHINGTON, Dec. 16 (UPI) -- The world could plummet into a 1930s-style Depression unless all countries fix Europe's spiraling debt crisis together, the world's lender of last resort said.

"There is no economy in the world -- whether low-income countries, emerging markets, middle-income countries or super-advanced economies -- that will be immune to the crisis that we see not only unfolding but escalating," International Monetary Fund Managing Director Christine Lagarde said.

"It is not a crisis that will be resolved by one group of countries taking action," she said at the State Department in Washington. "It is going to be hopefully resolved by all countries, all regions, all categories of countries actually taking some action."

If the international community fails to come together as one, the risk is economic "retraction, rising protectionism, isolation," Lagarde said. "This is exactly the description of what happened in the 1930s, and what followed is not something we are looking forward to."

The 1930s Great Depression was followed by World War II.

The Depression, which began in the United States with the Oct. 29, 1929, stock market crash, devastated virtually every country's economy, rich and poor. Personal income, tax revenue, profits and prices dropped, while international trade plunged more than 50 percent.

U.S. unemployment rose to 25 percent and in some countries the jobless rate reached 33 percent.

Cities worldwide were ravaged, especially those dependent on heavy industry. Construction all but stopped in many countries. Farming and rural areas suffered as crop prices fell by 60 percent.

The 2012 global economic outlook "is quite gloomy," Lagarde said, pointing to sharply downward economic-growth trends and sharply rising government deficits, both far greater than economists forecast.

European countries -- "and in particular the countries of the eurozone, which are sharing this monetary union" -- have a responsibility to show leadership in fixing the crisis, she said.

But it can't stop there, she said, adding the IMF could help.

The fund could be responsible for "organizing a collective financial responsibility, a fiscal solidarity and that element of risk-sharing that is expected, pretty much, around the globe," Lagarde said.

The fund is an organization of 187 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth and reduce poverty worldwide.

An IMF plan, agreed at a European Union summit the Brussels last week, seeks $261 billion from European countries and will then seek money from the rest of the world.

CPI up slightly

WASHINGTON, Dec. 16 (UPI) -- The Consumer Price Index for core prices rose 2.2 percent in November on an annual basis, one tick higher than October and within range of a federal target.

Core prices, which exclude food and energy items, rose 2.1 percent on a 12-month basis. The U.S. Federal Reserve's target is for 2 percent inflation on an annual basis.

For the second consecutive month, energy prices fell, which offset the index for food, which had prices rise 4.6 percent on an annual basis and 0.1 percent compared with October.

Energy prices dropped 1.6 percent from October, when they were down 2 percent from the previous month.

Consumer prices for all items were up 3.4 percent from October on an unadjusted 12-month basis, a drop from October's 3.5 percent annual inflation rate for all items.

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