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More Malaise

July 6, 2012 – 5:05 pm

The jobs report out this morning for June certainly was a disappointment as the U.S. is mired in a slowing economy. 80,000 new jobs is not enough to put new entrants in the labor force to work, let alone all the unemployed from the recession.

In response to the worldwide economic slowdown central banks this week lowered interest rates. The EU cut its rate to .75%, down a quarter of a point, the Peoples Bank of China cut their rate to 6% and the deposit rate to 3% and the Bank of England increased their QE by 50 billion pounds to 375 billion. For China this is the second rate change in a month. Banks everywhere are pushing on the cash machine to try and ignite some growth.

With the third month in a row of sub-par job growth in the U.S. will we see any effort from our politicians to at least address the fiscal cliff before the elections? Another month of these weak numbers might spur them to do something but more likely it is bringing the Fed closer to a new round of Quantitative easing, known as QE3. Extending Operation twist as they did in their last meeting just won’t do it. With the elections looming we might have to wait on the powers that be for any effort from Washington. Then again many times their actions are just a waste of money.

Good Trading
Steve Peasley

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