[Rhodes22-list] Facts for Slim - U.S. Jobless Rate Rose to 6.1% in August

[Brad Haslett]

More analysis from Vanguard below.  Note that the area of greatest job
losses  in the manufacturing sector was auto manufacturing.  No
surprise there with the run-up in gasoline prices. The construction
sector is still down (duh, don't have to explain that one to me). The
rise in factory orders (weak dollar and exports) is probably the only
thing from keeping things from looking worse, for now.  I'm with Rik,
we've got a ways to go before this cycle is over. Now would be a good
time to double down your bets on your "keep and hold'ems".

Brad

--------------------

Economic Week in Review: Jobless rate climbs amid sluggish growth

Further evidence of the economic slowdown was on display in this
week's economic report, highlighted by a 6.1% unemployment rate—the
highest in almost five years. At the same time, strong productivity
gains and modest wage growth helped restrain inflation. For the week,
the S&P 500 Index fell 3.2% to 1,242 (for a year-to-date total return
of –14.1%). The yield of the 10-year U.S. Treasury note fell 17 basis
points to 3.66% (for a year-to-date decrease of 38 basis points).
Unemployment rate climbed to a five-year high

The unemployment rate shot up to 6.1% in August from 5.7% in July, the
highest rate since September 2003 and well above analysts'
expectations. Since a slight dip in April, the joblessness rate has
risen by 1.1 percentage points. The decline in nonfarm payrolls, a
drop of 84,000 jobs, was also greater than expected. Jobs were lost in
August in every industry except for government, education, and health
services. Within the manufacturing sector, auto manufacturers
accounted for most of the lost jobs. At the same time, construction
job losses appear to be slowing. Average hourly earnings rose a modest
3.6% from a year earlier, trailing the rate of inflation.
Productivity grew surprisingly fast, helping dampen inflation

Nonfarm business productivity jumped at an annual rate of 4.3% in the
second quarter—faster than in the first quarter, higher than analysts
expected, and almost twice last month's initial estimate. Productivity
increased 3.4% compared with a year earlier, the strongest
year-over-year growth in four years. Productivity growth and
acceleration during an economic slowdown are historically unusual.
Analysts said this may be due to quicker-than-usual labor cutbacks by
employers reacting to weaker demand. Unit labor costs also declined
more than expected, by 0.5%; the preliminary estimate for this key
gauge of inflation was for a 1.3% increase. Coupled with the climb in
productivity, this suggests a dampening of inflationary pressures.
Two broad-sector gauges underscored economy's sluggishness

The Institute for Supply Management (ISM) index of manufacturing
activity inched slightly lower in August, to 49.9 from 50.0, despite
strong demand for exports, the major economic strongpoint at the
moment. ISM's index of service-sector activity grew slightly, to 50.6
from 49.5, although analysts noted that a rise in inventories suggests
that demand is weakening. Both indexes have been fluctuating around
the 50 level in recent months; a reading below 50 indicates a
contraction in these sectors.
Factory orders and shipments rose, construction spending fell

In other reports, factory orders and shipments in July increased for
the fifth-straight month, by 1.3% and 2.1%, respectively. The July
results were stronger than expected, although analysts pointed to
price increases as a major reason for the uptick. Construction
spending declined 0.6% in July, reflecting the continuing falloff in
the building of private residences during the weak housing market.
Construction spending on private nonresidential buildings, such as
offices, declined for the first time since 2007 because of the
generally slowing economy, analysts said.

On Fri, Sep 5, 2008 at 9:55 AM, David Bradley <dwbrad at gmail.com> wrote:
> Slim, you were looking for unemployment data the other day - here is
> the news flash from the Wall Street Journal.
>
> _________________________________
> NEWS ALERT
> from The Wall Street Journal
>
>
> Sept. 5, 2008
>
> The U.S. jobless rate jumped in August to a nearly five-year high of
> 6.1%. Nonfarm payrolls, which are calculated by a separate survey,
> declined by 84,000 in August, the eighth-straight decline.
>
> The unemployment numbers raise the risk of recession as households
> face a struggling labor market and high inflation. Meanwhile, the
> data, which included a modest rise in wages, support the view that
> Federal Reserve officials will hold interest rates steady when they
> meet later this month and at subsequent meetings through the end of
> the year.
>
>
> FOR MORE INFORMATION, go to:
> http://online.wsj.com/article/SB122061757763903639.html?mod=djemalert
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