It was only a couple of days ago that the stock market showed some real attitude, surging 400+ points ahead on nothing short of a pipedream. That takes gumption. It was followed by another stalemate yesterday. And then there was today, which can be called nothing less than a gutless performance.
November unemployment was released today and the rate slipped to 8.6%. Such a move, if legitimate, is more reason to rally than the irony that occurred just a few days ago. If that upward turn had serious legs the Dow would have surged higher on this “strong” employment news. But, once again, “the market” couldn’t get out of its own way.
This proves that today’s unemployment move was indeed a slip and not a fall.
First off, you’re splitting hairs between 9.0% and 8.6% unemployment — and that’s coming from a bald man. Such a move makes no difference unless followed by a series of similar moves. Second, it was only yesterday that the Wall Street Journal reported that “Jobless Claims Climb Back Over 400,000” (by Jeffery Sparshot and Eric Morath). In other words: jobless claims are up and the unemployment rate is down.
How does that happen?
Workers get eliminated from reality. In other words, those unemployed workers who have received the maximum benefits under law (99 weeks), and thus no longer are eligible to receive benefits, are no longer counted in the statistics – even though they’re still unemployed and still want work. These people fall into a category known not to be unemployed, but rather “underemployed.”
This, of course, is not to mention that many workers are hired for the holiday season in November. Many of these are full-time positions that will end after the retail industry conducts their year-end inventories as of January 31, 2012. This causes unemployment to fall temporarily – key word here: temporarily.
That’s why the stock market doesn’t have any mojo.
Feel free to opine.
Talk soon,