Unemployment Day, It’s Unemployment Day!
Friday brings us to the favorite part of the month when we sigh and think: were the Bush years really that bad?
Seriously, the August US unemployment rate is expected to jump increase to 9.5% from 9.4% in July and non farm payrolls are expected to have declined 230k. From a low of 4.4% in October of 2006, the number of unemployed has soared to 6.7 million in the United States. It’s one of the contributing factors for why President Obama is seeing his approval ratings sink.
The recovery is based primarily on inventory rebuilding and industrial order pickup with US exports accelerating. Factory orders and ISM manufacurting have shown improvement that leads me to believe they will resume hiring soon. Watch the average non farm weekly hours for an increase and a potential bump to income.
Hovever, consumer spending is lacking. This is why there is consternation over the lack of job creation even with growth returning this quarter. It’s seen as either unsustainable or lacklustre going forward.
In the markets, the oddity remains of why gold is rallying in the face of lower US bond yields and a relatively firm US dollar. The answer may lie in central banks keeping their foot on the monetary gas and indicating their foot is going to stay there for a long time. Additional reasons: Swiss bank clients switching out of US assets into gold, closing of a gold ETF, and worries over a Latvia default.
If China is our paradigm for how monetary stimulus leaks into commodity markets, then this is another reason why gold may be rallying as well.
Never a dull moment ahead of Payroll! Unlike others, I’ll be in all day watching to see if the link between Risk On/Risk Off breaks down.
Tags: Bush, gold, obama, unemployment
September 4th, 2009 at 10:21 am
I don’t think the Bush years were all that bad. Many Americans were living very well and obviously many were living beyond their means during that time. But as spoiled Americans we wanted to continue on that path, so as Americans we pressured President Bush to continue with policies and programs that temporarily kept prosperity for everyone afloat. But we all know how that ended up.
As far as the Stimulus Package I can’t deny that it is helping in some ways, but the money is being used on projects that produce short term results, such as Cash for Clunkers and building roads. As for an unemployed professional with a BA degree in Finance these programs have done nothing for me or the other unemployed professionals that I know.
I don’t agree with the need for the Stimulus Package, but if the money is going to be spent it should be spent on projects that create jobs now but will also continue to seed itself in the long run.
September 4th, 2009 at 12:39 pm
Remember, this whole mess began two years BEFORE Obama took office. People seem to have short memories. Things really were pretty bad during Bush’s final two years. People have just forgotten how bad it was in the beginning of the Great Recession. And remember, Bush had two recessions as president. No, things were not better when Bush was president.
September 4th, 2009 at 8:34 pm
I think you forgot to mention the Bush administration got us into the mess. Yes unemployment was 4.4% in 2006 and also 7.6 % in January 2009
may be your title should be “is President Obama fixing the Bush mess”.