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August 7, 2009 – 11:58 am

Early this week I suggested that the month of August just might be an up month, not down. It is still far too early to know but I also suggested that the jobs report for July, reported this morning, will likely be better than expected because of the fall in unemployment claims in recent weeks. The job loss for July came in less than expected at 247,000. The expectation was for about 350,000. Also the unemployment rate fell to 9.4%, a slight improvement.

It would be nice to seeĀ job creation but that is a lagging economic event. First there must be a pick up in the hours worked in a week. That statistic is also reported in the jobs numbers out this morning and it showed an increase in the work week. When that starts to happen actual job creation will begin. It is a slow process because after having employees work longer hours employers then use temporary workers until they are sure they need to hire more permanent workers. This is the main reason why job creation is a lagging indicator.

It appears that the recession is over or is ending. I realize it does not feel like it, and if you are one of the people losing their job and searching for another your personal recession is deepening, but economically the recession is over. The stock market will likely continue to rally but also it will be a bumpy ride with pullbacks of up to 10% from the highs.

Expect at least one more pullback before year end but use that as a place to invest.

Good Trading
Steve Peasley

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