Wow. And remember, the prior release's ncrease, to 5.7%, was hoped to be due to anomalies. There was discussion at that time that it might fall back with the next month's announcement. This may put a nail in the coffin as far as rate increase talk at the Fed is concerned.
From the
Wall Street Journal:
The U.S. jobless rate unexpectedly jumped in August to a nearly five-year high as employment fell for an eighth-straight month, raising the risk of recession as households face a struggling labor market and high inflation....
Nonfarm payrolls, which are calculated by a survey of establishments, declined 84,000 in August, the Labor Department said Friday. The pullback was broad-based, including manufacturing, construction and service industries. June and July were revised to show bigger declines. June's revision was particularly large, to a 100,000 loss in jobs from a prior estimate of just 51,000....
Wall Street economists had expected a 75,000 decline in payrolls last month and only a 5.8% unemployment rate, according to a Dow Jones Newswires survey.
From
Bloomberg:
``It certainly increases the probability that we really are in a recession,'' William Poole, former president of the Federal Reserve Bank of St. Louis, said in an interview with Bloomberg Television. ``It is a weak number, including the revisions.''...
The average work week remained at 33.7 hours. Average weekly hours worked by production workers fell to 40.9 hours from 41 hours, while overtime decreased to 3.7 hours from 3.8 hours.
Workers' average hourly wages rose 7 cents, or 0.4 percent, to $18.14 from the prior month. Hourly earnings were 3.6 percent higher than August 2007. Economists surveyed by Bloomberg had forecast a 0.3 percent increase from July and a 3.4 percent gain for the 12-month period. Average weekly earnings increased to $611.32 from $608.96.
The market reaction thus far isn't as extreme as it might be, but the day is young, but after ad pummeling like yesterday, a lot of investors probably wanted to dust themselves off and regroup. That isn't in the offing with a result like this. As the Journal's
MarketBeat noted:
Stocks fell. Futures tanked on the news, with Dow futures falling by more than 100 points. Some of the bad news may already have been baked in after Thursday?s grim jobless claims and ADP reports, but the dramatic rise in the unemployment rate still had the power to rattle equity investors.
The dollar diverged. The greenback continued to climb against the euro as most traders seem to view Europe?s economic prospects as even worse than the U.S.?s. But the yen rose against the U.S. currency.
Yields slumped. In recent trade, the two-year note was up 4/32 yielding 2.12%. Earlier in the global session it slipped below 2%, falling as low as 1.99%. The 10-year note was 22/32 higher yielding 3.56%, having earlier hit 3.55%.
The Dow is behaving a tad less badly than futures suggested, but we'll see how things progress.
Original source: http://feeds.feedburner.com/~r/NakedCapitalism/~3/384200113/unemployment-hits-61.html
