Friday, September 30, 2011
Saturday, September 3, 2011
Friday, September 2, 2011
Now that's going to leave a mark
Good morning everyone, the Department of Labor just released
the non-farm payrolls number for August and it was ugly. The unemployment
rate stayed at an already high 9.1% and zero jobs were created but the last two
months were revised for the worse by 56k so we actually lost a total of 56k not
zero. The private sector created only 17,000 jobs when 110k was expected
and the average workweek stayed the same at 34.3 and hourly earnings fell 0.1%
vs. an expected rise of 0.2%. This all means that employers were not
working their employees any more hours and paying them less which leads to
lower consumption down the road. In a consumer driven economy like we
have this adds bricks to the wall of worry the market has to climb. In
reaction to these numbers stock futures sold off hard as did the US dollar
while gold and bonds rallied. The internals of the jobs numbers needs
some context so about 50k of Verizon workers became unemployed because of their
strike and a similar number of government works went back to work so it was a
wash. I don’t see how Washington can spin this in a positive way as much
as they may try, there is even more talk of the Fed doing a 3rd
round of quantitative easing to try and stimulate the economy. Employers
are on strike and are not going to hire as long as there is so much anti
business rhetoric coming from Washington. The last round of Fed
quantitative easing (QE3) goosed stock and commodity prices but when the
QE3 ended prices have come right back down and employment is worse than
before. We are out of money and have been for some time so it seems as if
it is time to try something different. The President should read the Wall
Street Journal’s assessment of Jon Huntsman’s economic plan that was just
announced, he could do worse.
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