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Nice, But Not That Nice

December 2, 2011 – 4:59 pm

The jobs report out this morning seems to suggest that the job market is a little better. The actual number of new jobs created was slightly less than forecast at 120,000 but the unemployment rate fell to 8.6% from 9%. The reason was that 315,000 people stopped looking for a job thus making the rate look better. The real improvement came in the number of new jobs being revised upward in the previous two months.

We will need about 250,000 new jobs every month for several years to put the unemployed to work and get the jobless rate below 6% which was the pre recession level. So far that just does not seem doable.

The economy is improving and it should continue to do so but the pace is such that we will have to adjust our thinking and accept a higher unemployment rate. That will last until at least Europe gets on the path to recovery and that too seems not doable in the short term, plus the reluctance of our government to spend any more money to boost the economy which will result in a continued slow pace. Government jobs in particular appear to be on a downward track as we deal with our own debt issues. Maybe that is a bad thing; it just won’t help the jobless as they search for work.

This morning’s numbers certainly are more positive than negative and in that we can take a little comfort.

Good Trading
Steve Peasley

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