Jump to content
House Price Crash Forum
Willy Weasel

Us Economy On The Skids

Recommended Posts

The U.S. economy unexpectedly lost jobs in August for the first time in four years, raising the risk the economy may stall in the second half and serving as a warning for the Federal Reserve to lower interest rates.

Employers cut 4,000 workers from payrolls, compared with a revised gain of 68,000 in July that was smaller than previously reported, the Labor Department said today in Washington. The unemployment rate held at 4.6 percent as almost 600,000 people left the workforce.

``Rate cuts will be right around the corner,'' Chris Rupkey, senior financial economist at Bank of Tokyo Mitsubishi UFJ Ltd. in New York, said before the report. ``At this stage, they don't need the cover of any more weak economic data to act.''

The drop in jobs is the clearest sign yet that the deepening housing recession and turmoil in credit markets are hurting the wider economy. Payrolls are one of the main factors, along with sales, incomes and production, that help determine the starting point of economic contractions, and today's report may raise the odds the Fed reduces rates even before the Sept. 18 meeting.

Treasuries climbed and stock index futures dropped. The yield on the benchmark 10-year note fell to 4.44 percent at 8:32 a.m. in New York from 4.51 percent late yesterday. Two-year note yields slid below 4 percent, indicating traders anticipate a series of Fed rate cuts. The central bank's current target rate is 5.25 percent. Futures on the Standard & Poor's 500 index fell 0.7 percent to 1,469.60.

Surprise to Economists

Economists surveyed by Bloomberg News had forecast that payrolls rose 100,000 during the month, according to the median of 88 estimates, compared with an originally reported 92,000 gain in July. None of the analysts foresaw a decline, as predictions ranged from 35,000 to 140,000.

Revisions subtracted 81,000 workers from payroll figures previously reported for June and July.

Looks like the diverse US economy is in deeper trouble than expected.

Sterling in vertical climb against the Dollar

Share this post


Link to post
Share on other sites

The U.S. currency declined as the payroll data raised speculation losses from subprime mortgages that have weakened the credit markets are spilling over into the broader economy. Federal funds interest-rate futures show traders are betting, with 100 percent certainty, the Federal Reserve will lower rates to at least 5 percent on Sept. 18.

Share this post


Link to post
Share on other sites
The U.S. currency declined as the payroll data raised speculation losses from subprime mortgages that have weakened the credit markets are spilling over into the broader economy. Federal funds interest-rate futures show traders are betting, with 100 percent certainty, the Federal Reserve will lower rates to at least 5 percent on Sept. 18.

This is not good lets hope it is too late.

In the meantime Sterling is going to have a field day. :o(

Bye bye exports!

Share this post


Link to post
Share on other sites
The U.S. economy unexpectedly lost jobs in August for the first time in four years, raising the risk the economy may stall in the second half and serving as a warning for the Federal Reserve to lower interest rates.

Employers cut 4,000 workers from payrolls, compared with a revised gain of 68,000 in July that was smaller than previously reported, the Labor Department said today in Washington. The unemployment rate held at 4.6 percent as almost 600,000 people left the workforce.

``Rate cuts will be right around the corner,'' Chris Rupkey, senior financial economist at Bank of Tokyo Mitsubishi UFJ Ltd. in New York, said before the report. ``At this stage, they don't need the cover of any more weak economic data to act.''

The drop in jobs is the clearest sign yet that the deepening housing recession and turmoil in credit markets are hurting the wider economy. Payrolls are one of the main factors, along with sales, incomes and production, that help determine the starting point of economic contractions, and today's report may raise the odds the Fed reduces rates even before the Sept. 18 meeting.

Treasuries climbed and stock index futures dropped. The yield on the benchmark 10-year note fell to 4.44 percent at 8:32 a.m. in New York from 4.51 percent late yesterday. Two-year note yields slid below 4 percent, indicating traders anticipate a series of Fed rate cuts. The central bank's current target rate is 5.25 percent. Futures on the Standard & Poor's 500 index fell 0.7 percent to 1,469.60.

Surprise to Economists

Economists surveyed by Bloomberg News had forecast that payrolls rose 100,000 during the month, according to the median of 88 estimates, compared with an originally reported 92,000 gain in July. None of the analysts foresaw a decline, as predictions ranged from 35,000 to 140,000.

Revisions subtracted 81,000 workers from payroll figures previously reported for June and July.

Looks like the diverse US economy is in deeper trouble than expected.

Sterling in vertical climb against the Dollar

I wonder if Great Crash 2 will be contained on the US side of the Atlantic?

Share this post


Link to post
Share on other sites
Do you? I thought you were pretty certain on that particular subject ;)

I think its a bit late for that. If median house prices dropped 6% last month or whatever it is, its way too late to do anything about it. They may make it land a bit flatter though.

Share this post


Link to post
Share on other sites

http://uk.biz.yahoo.com/07092007/214/londo...ms-footsie.html

Friday September 7, 02:00 PM
London afternoon: US jobs shock slams Footsie
LONDON (ShareCast) - News of an unexpected drop in US payrolls last month has prompted a sharp move lower in London, with financial plays still the worst performers.
Non-farm payrolls fell by 4,000 in August, the first decline in four years, versus expectations that around 110,000 jobs would be added during the month. Unemployment stayed at 4.6%.

Deary me--4,000 jobs lost. How ever will the US economy absorb that many jobs. That is 4,000 houses on the market to add to the woes!

A thought though. Brown has been much busier than that and has dropped 8,000 jobs in manufacturing alone and the BBC may no mention. Let's see that's twice as many as 4,000 in a country with a population one sixth of the size? I think Brown gets away with it because he has given the sheeple HPI so who needs jobs?

http://www.chamberonline.co.uk/YdiDw35oarMi4g.html

Research by the British Chambers of Commerce (BCC) has revealed there have been nearly
8,000 job losses
across the UK manufacturing sector since Jan 1 2007
Edited by Realistbear

Share this post


Link to post
Share on other sites
http://uk.biz.yahoo.com/07092007/214/londo...ms-footsie.html

A thought though. Brown has been much busier than that and has dropped 8,000 jobs in manufacturing alone and the BBC may no mention. Let's see that's twice as many as 4,000 in a country with a population one sixth of the size? I think Brown gets away with it because he has given the sheeple HPI so who needs jobs?

He gets away with it because the "media" in the UK are pigging useless scum that are failing to do their job properly. They are criminally inept.

Share this post


Link to post
Share on other sites

Don't worry about IR falling in the US.

It's already too late to stop the economy deflating.

A cut in rates will push the dollar down and oil prices up.

The carry trade will unwind.

IR could well go to zero as in Japan but HPI will not re-ignite.

It's deflation all the way now.

The UK will follow.

Edited by WiseBear

Share this post


Link to post
Share on other sites
Don't worry about IR falling in the US.

It's already too late to stop the economy deflating.

A cut in rates will push to dollar down and oil prices etc will rise.

The carry trade will unwind.

IR could well go to zero as in Japan but HPI will not re-ignite.

It's deflation all the way now.

The UK will follow.

I'm not sure. The same US employment figures that triggered today's stock market falls also shows US wage inflation is running at 3.9%, that's alongside growing unemployment. I think wage led inflation will start to pick up speed now, and with the UK's winter of discontent brewing up I think we're pretty close behind on that particular road. 1970's stagflation here we come.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 351 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.