Friday, June 05, 2009

Jobs report...

So much for getting that number right... Job losses were surprisingly light - just 345k jobs in May.

However, as expected the Bureau of Labor Statistics found that this robust economy has inspired enough small businesses to "CREATE" 220,000 NEW JOBS in May that are out there somewhere, we just can't find them yet.....

This number remains a joke. These jobs never existed during the boom times and they certainly aren't being created in this environment.

Oh, and the unemployment rate jumped to 9.4% in May. Remember those stress tests on the banks? They assumed that the absolute worst case would be 10% unemployment by the end of 2010. We might be there by July.

Also, I always watch an obscure number called U-6. It's a combination of unemployment, but underemployed (a heart surgeon working as a Walmart greeter) and part-timers that want to work full-time. It's a better measure of the economy in my opinion. We crossed 16% in May -- that's a disturbing number.

Markets will likely soar initially on this news but watch for a Friday "sell the news" reaction late in the day (however, there could be lots of support for a further rally).

Ultimately, this fits with my thesis that the recession will slowdown in its severity throughout the second half of 2009 before taking another leg down in 2010.

Cheers!

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