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Still No Jobs

July 8, 2011 – 4:57 pm

This morning the very weak June jobs report put a screeching halt to the rally from our correction that ended a couple weeks ago. It is surprising that the market is not weaker when you consider that only 18,000 jobs were produced. That is not just bad, it is terrible. The ADP report out yesterday said we produced 157,000 jobs. They couldn’t be more wrong. For investors this is the second month in a row of falling jobs and three months means a trend has been put in. That makes everyone very nervous.

Attention will now turn to earnings, the debt debate in Washington and any economic statistics that might hint at either further job losses or a pickup. The experts have been calling for a pickup in the second half of the year for the economy but it certainly looks like that pick up is going to be less than they previously projected. The first quarter GDP grew at 1.9% but the prediction for the year by the government was for 3 to 3.5%. At least that was their call at the beginning of the year. They have reduced that number to 2.5 to 3% and that certainly seems more realistic. But even that number is not achievable unless jobs pick up.

I think jobs will pick up but not by enough.

Good Trading
Steve Peasley

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