Friday, September 04, 2009

August Unemployment rate: Worse than analysts expected.

AUGUST UNEMPLOYMENT RATE HITS 9.7% WHICH WAS MUCH HIGHER THAN EXPECTED. AND JULY NON-FARM PAYROLlS WERE REVISED DOWN. The July Unemployment rate was 9.4% by comparison. This is not what economists expected and foretells of a higher Unemployment rate over the next few months. June Non-Farm Payrolls were also revised downward. Dow Futures first went down on the news and then up, but don't believe it. The market most likely will be down by the end of the day going into the long Labor Day weekend.

According to Mohamed El-Erien, Pimco's Co-CEO, who was on CNBC this morning, the recovery will not have the lubricant it needs to fuel the economy, as Banks can't lend money, as they are in bad shape themselves. It will depend on wages from workers and their willingness to spend.

UPDATE: 6:00pm PST

The market made me wrong again today as we closed up in all Indexes. A dear friend of mine said to me today that whatever the market should do, it does the opposite. I think he's right. I know this call today, regarding the market closing down before the long weekend, was wrong.



Anonymous Elizabeth Barrette said...

Add in the fact that the government crops the data to make it look like unemployment is not as bad as it really is -- for example, by not counting people who have been unemployed for more than 2 years. So the real rate is nearly double the published rate, currently approaching 20%.

1:56 PM  
Anonymous Mac C. said...

So, if the Aug report was so negative, the question is why did the stock market respond to this new data positively (up 100 points on the DOW) today? Seems that not everyone is viewing this update as a negative.

5:35 PM  
Blogger Charles Amico said...

Mac, and your point is? My point is that it is bad for the economy and it is bad for families. The stock market appears to be disconnected from reality even looking out the usual 6 months. If you want to stick your neck out and Buy into the stock market, be my guest. I am raising cash right now.

9:59 AM  

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