Thursday the U.S. Department of Labor announced that the U.S. economy shed 95,000 jobs total (!). The huge majority of those jobs were census workers and other government employees at both the national, state and local levels. The private sector added 64,000 jobs in September. These totals meant that the unemployment rate remained unchanged at 9.6%.
Analysis: By now this is a tired old refrain – we are locked in a game of chicken between U.S. citizens and U.S. businesses. Who will spend that extra bit of money first? Will consumers buy that incremental item when they fear losing their jobs? Or will business hire that extra employee when their revenues remain flat?
I will say it again: sans external stimulus from an entity outside of the capitalist system we will remain in this gridlock for a long while. My previous prediction was 18-24 months. However, the seeds of an escape from the labyrinth are already in place. Because consumers are not spending that incremental dollar they bring home, they are instead, saving it. Eventually the fear that many consumers have of what they would do if they lost their job when they are carrying high personal debt levels will fade as those debts are paid off. That will eventually lead to consumers spending that incremental dollar.
Then of course we also have rumblings and ramblings from the Federal Reserve that they will spend BIG money to help the U.S. economy. And after the mid-term elections expect some sort of movement out of Congress to help the U.S. economy. In the meantime, U.S. businesses remain for sale at bargain prices. Have you been looking? Have you bought?
Importance grade: 10; these data are the most important on the planet right now. Unfortunately and unsurprisingly, they remain unchanged.
Jason
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