Unemployment rises to 5%

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preserve
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Unemployment rises to 5%

Post by preserve »

http://www.marketwatch.com/news/story/j ... ABE908C%7D
I take it July's credit crunch is finally hitting main street.

or maybe the markets reacted to hucakbee and obama... Joking.
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MR_Rossi
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Post by MR_Rossi »

Did you see all the comments that were posted for that article? According to the readers, we're headed for Armageddon and we should stockpile gold and silver. Thank god for the rational Diehard's web-site!
MWCA
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Post by MWCA »

MR_Rossi wrote:Did you see all the comments that were posted for that article? According to the readers, we're headed for Armageddon and we should stockpile gold and silver. Thank god for the rational Diehard's web-site!
Isnt it always like that. It the good times no one can do no wrong. When things drop a bit its PASS THE AMMO and batten down the hatches! ;)
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tadamsmar
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Re: Unemployment rises to 5%

Post by tadamsmar »

preserve wrote:http://www.marketwatch.com/news/story/j ... ABE908C%7D
I take it July's credit crunch is finally hitting main street.

or maybe the markets reacted to hucakbee and obama... Joking.
Seems like an employment uptick might hit Wall Street, since higher unemployment implies more mortgage defaults?
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preserve
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Re: Unemployment rises to 5%

Post by preserve »

tadamsmar wrote: Seems like an employment uptick might hit Wall Street, since higher unemployment implies more mortgage defaults?
Mortgage defaults being one of the many casualties.

With inflation rising, the market is concerned that the Fed will only be able to pull off a couple more rate cuts.

The market had previously cheered unemployment upticks because they knew a fed cut would follow. In this particular case, it is unclear if the Fed has much room to do so after 2008.

In hypothetical basis, imagine what the Fed will be able to do by the time the unemployment rate reaches back up to the historic norm of 7%. I think this is what the market is scared of.

Obviously, the uptick in unemployment could just be a blip.
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ryuns
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Post by ryuns »

It still seems interesting to me when I read that unemployment is ALL THE WAY up to 5%. I grew up reading our local paper in CA's San Joaquin Valley about 12-15% unemployment. The reason is pretty obvious: large immigrant and farm worker population, plus low-ish cost of living compared to the rest of California, a poorly educated population, etc etc. But our county puts a different spin on it:
Tulare County's family atmosphere fosters a stable workforce invested in community. Tulare County's 12.6% unemployment rate is partly due to a majority of the workforce having a committment to the area, and to "making it work right here".
Huh.
FinanceGeek
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Post by FinanceGeek »

I agree, 5% unemployment used to be considered "excellent" not too far back. In fact I think levels around 3% to 4% are often quoted as "full employment".

As for CA's central valley, I must say - that place seems to make places like New Jersey or even Cleveland sound not-so-bad.
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stratton
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Post by stratton »

The WSJ had an article on unemployment. Germany is ~8.2% right now and thats the lowest in several years. Two years ago it was 10+%.

Paul
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nisiprius
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Post by nisiprius »

I'm just happy that a rise in unemployment made the stock market go down.

Back circa 1990, it appeared that Wall Street loved layoffs and unemployment. Every time a company had a layoff its stock would rise, and every time unemployment went up the stock market would go up.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Jack
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Post by Jack »

stratton wrote:The WSJ had an article on unemployment. Germany is ~8.2% right now and thats the lowest in several years. Two years ago it was 10+%.

Paul
German unemployment numbers are not comparable to U.S. numbers because the methods are different. The German unemployment numbers include part time workers who make up about a quarter of the total. Part time workers are not counted as unemployed in the U.S. If you look only at West Germany, the equivalent unemployment rate is very similar to the U.S. East Germany is still in recovery and skews the numbers. It would be as if the U.S. annexed Mexico.
tibbitts
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question

Post by tibbitts »

I don't know any statistics, but it seems like today a lot more of us are contract workers vs. employees than was the case years ago. It would seem that this would reduce the reported nonfarm uemployment, since we can never be "unemployed", even when we can't find any work. So I'm not sure that even comparisons to the U.S. in the past would be accurate. Does anybody have any information on this?

Paul
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preserve
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Re: question

Post by preserve »

tibbitts wrote:I don't know any statistics, but it seems like today a lot more of us are contract workers vs. employees than was the case years ago. It would seem that this would reduce the reported nonfarm uemployment, since we can never be "unemployed", even when we can't find any work. So I'm not sure that even comparisons to the U.S. in the past would be accurate. Does anybody have any information on this?
Paul
I agree with you. Obviously, politicians would not want to point this out.

I think for this reason, many economists look at the direction the unemployment rate is going instead of the actual rate itself.
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VictoriaF
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Post by VictoriaF »

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Peter Foley
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Post by Peter Foley »

tibbits et al.

There are really two unemployment rates. The one most often quoted (Total Unemployment Rate or TUR) is based on a survey done under the auspices of the US Department of Labor. This survey would capture the unemployment of independent contractors who are out of work and are looking for work if they answer the questions in such a way as to include themselves in the workforce. This rate can be distorted (low) by discouraged workers who, especially during recessions, have given up looking for jobs and are not considered part of the labor market. During very low unemployment some "discouraged workers" return to the labor market and slightly inflate the TUR.

The Insured Unemployment Rate (IUR) relates to the percentage of workers who are unemployed and collecting unemployment insurance. Independent contractors (and most business owners) would not be counted in the IUR.

These are layman's definitions. The DOL Bureau of Labor Statistics has much more precise definitions.
sport
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Post by sport »

FinanceGeek wrote: that place seems to make places like New Jersey or even Cleveland sound not-so-bad.
I beg your pardon. :wink:
timid investor
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Post by timid investor »

MR_Rossi wrote:Did you see all the comments that were posted for that article? According to the readers, we're headed for Armageddon and we should stockpile gold and silver.
I'm all for it, as a matter of fact I was beginning to sweat thinking I'd have to wait until global warming caused a catastrophe.

Good to know people still panic over nothing, the sooner the better.
Let's have an equities fire sale this year.
demsni
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Central Valley

Post by demsni »

Cleveland and New Jersey are not 1.5 to 2 hours from the following:
San Francisco Bay Area
Monterey/Carmel
Santa Cruz
Delta Region
Napa Valley (actually 3 hours)
Yosemite
Gold Country
Lake Tahoe (3 hours)

Not bad day trip choices for the poor dwellers of "Appalachia West"
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