Dollar Firms
Jun 8th, 2009 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar was sharply higher against the euro. Late Friday, the euro was trading at $1.3968 vs. $1.4171 on Thursday.
The day’s big numbers were in the much-anticipated employment report from the Labor Department, which said that job losses slowed in May. Labor said that nonfarm payrolls declined by 345,000, the smallest job destruction in eight months. That was far under economists’ projections for something closer to 500,000.
The currency market surely took note, as this “may be the stamp of approval we’ve ended the panic period,” in the words of Max Bublitz, chief strategist at SCM Advisors. “People think they don’t need to sell the dollar.”
However, the drop in job loss was nowhere near job creation. “The pace of deterioration is slowing, but we are still a long way from the point of stability in both the labor market and the broader economy,” said David Greenlaw, of Morgan Stanley.
The report also noted that the economy has lost 6 million jobs since the recession began in December 2007. Payrolls have fallen by 4.3%, the biggest loss since the 1957 recession.
Underlining the seriousness of the situation, overall unemployment rose by 787,000 in May to 14.5 million, pushing the jobless rate from 8.9% to 9.4% — the highest level since August 1983. Unemployment is up 5% from its low, the biggest increase since the Great Depression.
And that’s just the leading edge of the wave. If the data included discouraged workers and those whose jobs have been cut back to part-time status, the number of un- and underemployed rose to 16.4% from 15.8% in April. The number of workers forced into part-time positions rose by 164,000 to 9.1 million.
We are not out of the woods yet.
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Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.