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The U.S. unemployment rate surged to 10.2% in October, up from 9.8% in September, as the nation lost 190,000 jobs. Economists had expected job loss of 150,000 to 175,000. The number of unemployed persons rose by 558,000 to 15.7 million. The unemployment rate among Hispanics is 13.7% and among African-Americans 15.7%.
The most important percentage continued to rise. The underemployment rate, which includes the jobless, part-time workers, and those who have given up searching for a job, rose to 17.5%.
The grim news for Main Street is actually worse. The government has a computerized number it plugs in called the birth/death adjustment model, which supposedly reflects the job situation at companies that have just been formed. This reported a GAIN of 86,000 jobs in October. But the number is not credible. On Wednesday, the ADP Report of private sector employment reported a LOSS of 75,000 small business jobs in October. These numbers are not exactly apples/oranges, but they are close.
Stocks initially sold off mildly on the news, but as this is written, are up. Wall Street gamblers exulted this morning that rising unemployment means that the Federal Reserve will continue loaning money at essentially a zero interest rate. (The Federal Reserve had indicated this earlier in the week.) Now some say zero rates will continue into 2011. This means that big institutions can borrow dollars at zero rates and gamble in various markets. This is a worldwide phenomenon, as central banks pursue easy money policies. Globally, stocks, bonds, and commodities are all surging despite (or really because of) the grim economic news. The mentality on Wall Street is "sell the dollar and buy anything." The dollar is cratering. This will end badly, but nobody knows when.
The U.S. unemployment rate surged to 10.2% in October, up from 9.8% in September, as the nation lost 190,000 jobs. Economists had expected job loss of 150,000 to 175,000. The number of unemployed persons rose by 558,000 to 15.7 million. The unemployment rate among Hispanics is 13.7% and among African-Americans 15.7%.
The most important percentage continued to rise. The underemployment rate, which includes the jobless, part-time workers, and those who have given up searching for a job, rose to 17.5%.
The grim news for Main Street is actually worse. The government has a computerized number it plugs in called the birth/death adjustment model, which supposedly reflects the job situation at companies that have just been formed. This reported a GAIN of 86,000 jobs in October. But the number is not credible. On Wednesday, the ADP Report of private sector employment reported a LOSS of 75,000 small business jobs in October. These numbers are not exactly apples/oranges, but they are close.
Stocks initially sold off mildly on the news, but as this is written, are up. Wall Street gamblers exulted this morning that rising unemployment means that the Federal Reserve will continue loaning money at essentially a zero interest rate. (The Federal Reserve had indicated this earlier in the week.) Now some say zero rates will continue into 2011. This means that big institutions can borrow dollars at zero rates and gamble in various markets. This is a worldwide phenomenon, as central banks pursue easy money policies. Globally, stocks, bonds, and commodities are all surging despite (or really because of) the grim economic news. The mentality on Wall Street is "sell the dollar and buy anything." The dollar is cratering. This will end badly, but nobody knows when.