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Unemployment rate hit a five-year high
GALLERY
Hard Times
Think the current economic crisis is bad? Before you decide, take a look at the bubbles, panics and depressions of the past.
August's dismal employment numbers signal a bleak economic outlook.
On Friday, the U.S. Labor Department reported an unemployment rate that floated up to 6.1%, as nonagricultural employers slashed yet another 84,000 jobs. The figure marks the highest jobless rate in five years, following eight consecutive months of cuts. Pink slips were being handed out across industries and sectors.
"The most important detail is the substantial increase in the unemployment rate over a six-month period, which was the largest in 25 years," said Carl Riccadonna, senior U.S. economist at Deutsche Bank, "and such a stark backdrop is not the stuff of a solid economy or a Fed that will raise rates." Riccadonna added that Friday's figure corroborates his view that the U.S. Federal Reserve will hold rates steady through the end of 2009. "The big concern now is a growth recession, which is an extended period of below-trend growth accompanied by rising unemployment."
Investors can take some minor comfort knowing that extended unemployment benefits padded August's figure.
Employment figures are arguably the most insightful tool Wall Street has in discerning the economy's condition, and August's dramatic reading sent futures into a nose dive. In morning trading, the Dow Jones industrial average fell 1.2%, or 129 points, to 11,059, while the S&P 500 index dropped 1.4%, or 17 points, to 1,220.
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Member Comments
Posted By: Tea6 @ 09/06/2008 1:51:55 PM
Comment: I was originally attracted to the Republican Party because they were the party of rational thought, the party of logic. Back in the late 1970's the Democrats were the party of ill-logic. Union work rule restrictions that made no sense, crazy environmental laws (snail darter), harmful social policies (welfare as a way of life), high tax rates that took away all incentive and a defeatist national defense policy. It was a bubble in Democrat power that caused these excesses.
Today the worm has turned. It is the Republicans who are in a power bubble. They are the ones who have become illogical and irrational. Other ill-logical by-products of this Republican power bubble include: the encouragement of illegal immigration. I have never heard as many illogical arguments on why our immigration laws should be broken and the selfish justifications for undermining the poorest citizens of our country. Another illogical argument is for unfettered free trade. With new technology, most jobs can now be outsourced: accounting, medical research, editing etc. How can workers compete if their cost of living is 5 times higher than someone in Asia? It is not that they are overpaid; it is that their basic living costs are way higher. Originally under Reagan free trade was promoted as a way to move Americans into higher skilled, higher paying jobs. At the time that made sense, but now these higher skilled jobs can be outsourced, driving down wages and opportunity. This does not make sense.
There are many other areas were Republican policies have become ill-logical. I suspect most Republicans will not get it, as it is difficult to understand when you are inside the bubble. Power corrupts absolutely. Once again it is time for a change. Obama will become the new Reagan for the Democrats. Logic wins out in the end. Too bad parties cannot learn to moderate their actions. But, I guess it is human nature that leads to excess and bubbles and that cannot be changed.
Posted By: labman57 @ 09/05/2008 10:03:16 PM
Comment: Einstein said that insanity is doing the same thing over and over and expecting different results. McCain's economic policy is a virtual copy of the Bush administration's policies of the past 8 years. But then, McCain has already acknowledged that he doesn't know anything about economics...