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If US unemployment rates were estimated as 9.6%...?

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If US unemployment rates were estimated as 9.6%...?

Postby fay11 » Mon May 06, 2013 1:12 pm

Why have we seen such a large decline today? Because data has come in as 9.5%(FT times) that's below estimates. That 9.6% data is from Bloomberg by the way.

Surely todays bear environment is only due to the rally we experienced yesterday because unemployment is in line with forecasts.

So tommorow we should be expecting another rally, correct? The stocks have already hit their support.
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If US unemployment rates were estimated as 9.6%...?

Postby sedgewick » Mon May 06, 2013 1:18 pm

This sounds a lot like the rhetoric the Obama Administration dishes out, and no one wants to swallow it.

I saw this coming all week. This move has happen before. There is a holiday shorten week, end of a quarter, we (those who are alert) expect to see a negative economic report by the end of the week. So what's the trade?

We rally in the early part of the week, and sell off on the news.

I have a hard time hearing that jobs are improving because only 467,000 MORE people lost their job this month.
http://www.guardian.co.uk/business/2009/jul/02/us-unemployment-june-467000

That's is like saying a fallacy of logic: "Well, we expected 600,000 people to lose their job last month... look only 467,000 lost their job, the economy must be booming."

This may be seen as a fallacy of logic. One can make up any number and then the actual number appears better than the made up forecast, then run to some false conclusion, such as "fewer jobs losses are a positive sign for the economy."

The facts are that job losses pushing at 500,000 a month is not a positive economic sign, and would suggest that the recover will be longer than many might have predicted.

Unemployment is at a 26 years high, and I'm taking bets we'll see this hit double digits (10%+) before Q2 2010, poss as early as this fall.

Why do I think unemployment will go to 10%+ I cited a Reuters article I believe it was last April 2009 that said,

"One in 10 Americans gets help from U.S. to buy food"
http://www.reuters.com/article/domesticNews/idUSTRE5314B320090402

I figured that most of these people are unemployed or low wage and have the highest risk of job losses. Considering manufacturing slow down increasing since 2008 would add to the fire.

So really, the unemployment rate was not in line with expectations:

"The US labor department said that 467,000 people lost their jobs in June. Economists had expected a figure of 363,000."
http://www.guardian.co.uk/business/2009/jul/02/us-unemployment-june-467000

"Employers cut a larger-than-expected 467,000 jobs in June,"
http://www.foxnews.com/politics/elections/2009/07/02/nations-unemployment-rate-edging-closer-double-digits/

I would argue if one looks at where jobs are being created it is not the private sector, it is the government sector. I would further argue that these are not the jobs to grow an economy but to influence the numbers.

FYI:
The U.S. financial markets will be closed Friday, July 3, 2009 in observance of the Sat July 4th Independence Day.
http://www.nyse.com/about/newsevents/1176373643795.html

And one of the other reasons for the market to be down: Traders generally don't like to hold long positions over a long holiday weekend.
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If US unemployment rates were estimated as 9.6%...?

Postby hanoch76 » Mon May 06, 2013 1:25 pm

Perhaps you are paying too much attention to individual economic numbers and not enough to the overall situation. Many of these numbers are lagging indicators that already have been priced into the market.

The thing to keep in mind is that markets have already priced in a V-shaped economic recovery for the second half of this year. The second half of this year has started. But consumer confidence is going down. And non-farm payroll losses have unexpectedly increased. Instead of a robust recovery, it's not even clear that the economy has stopped getting worse.

The thing about the stock market is that it tries to predict the future of the economy. And a lot of its predictions turn out to be false. Because nobody knows the future, including stock market investors.
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If US unemployment rates were estimated as 9.6%...?

Postby conleth58 » Mon May 06, 2013 1:27 pm

Although the unemployment rate came in just below the prediction, the job losses were 33% higher than last month, meaning that the economy i snot rebounding as well as most people hoped. Had job losses been closer to last month's report, given the reported unemployment rate, we probably would have seen a small rally.

Don't expect a rally tomorrow as the markets are closed.
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If US unemployment rates were estimated as 9.6%...?

Postby ruarc » Mon May 06, 2013 1:38 pm

It's actually 9.4%. There's no US macroeconomic data release tomorrow. The NYSE is closed Tomorrow July 3 for Independence Day (July 4). The unemployment figures are skewed by the impact of the auto industry.
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