Jobs Report Stuns Market
Jun 7th, 2008 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar was shoved down mercilessly against the euro. Late Friday, the euro was trading at $1.5777 vs. $1.5568 on Thursday.
The stunner of the day was administered by the report from the Labor Department showing that the unemployment rate in May rose to 5.5%, the highest since October 2004. The 0.5% jump was the steepest in seasonally adjusted unemployment in 33½ years, and far exceeded economists’ projections for rise to just 5.1%.
Nonfarm payrolls fell by 49,000 last month. It was the fifth consecutive decline and was in line with expectations. Of course, even that negative number may be optimistic, as the Bureau of Labor Statistics net birth/death adjustment added 217,000 phantom jobs to May’s data.
Those trying desperately to spin the data, such as commentators on CNBC, argued that the huge jump in unemployment was seasonal, and due to teenagers and students entering the job market for summer work. But realists pointed out that the same thing happens every year, and that this spike was singularly big.
The implications are clear.
As Sal Guatieri, an economist at BMO Capital Markets, wrote: “The U.S. is in recession. Job losses, along with a plethora of other headwinds, should ensure that the rebate boost to spending is short-lived, and that the Fed refrains from tightening in ‘08.”
Source: Jobs Report Stuns Market
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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.