Although earnings weakness has been most pronounced for high-tech firms, where the previous extraordinary pace of expansion left oversupply in its wake, weakness is evident virtually across the board, including most recently in earnings of the foreign affiliates of American firms. Much of the squeeze on profit margins of domestic operations results from a rise in unit labor costs.
Growth rates in the East Asia-Pacific region are generally robust, but below their pre-crisis levels. Nevertheless, Asia has remained an engine of growth for the global economy, and our regions are increasingly interconnected through trade and finance. In this context, I very much appreciate the fruitful exchange of views with our counterparts here in the East AsiaPacific region.