Let me preface this post with the following: (1) Yes, the August jobs report was extremely disappointing and (2) Yes, the report strengthens the argument of those who think there will be a double-dip.
But before jumping to conclusions, I offer these thoughts:
- Remember the week following S&P’s downgrade of the U.S. bond rating? And how stock markets experienced one of the most volatile weeks of trading on record? That week represented Wall Street’s reaction to the economic disaster that comprised the debt ceiling debate combined with European debt woes; this jobs report represents Main Street’s reaction to all of the above. The complete lack of job creation in August is not the result of anything new and unforseen; rather, it is the reaction of businesses to the economic uncertainty that dominated the beginning of the month.
- IN OTHER WORDS, I think that job growth will resume in September, in a big way. The second half of August was much more encouraging than the first half, but because of the time it takes to analyze jobs numbers, that optimism was likely not reflected in the jobs report for the month. I believe that the optimism stemming from the latter half of August will act as a precursor for job growth this fall.
ALSO, here is an important point to consider: the abysmal jobs numbers for August will (hopefully) prompt a strong reaction from President Obama and Congress. So-so results may have meant maintaining the status quo, but the complete lack of job growth means there will be a resounding call to action. The question is, will Congress and will President Obama find a common ground?
Welcome back to the office after the long Labor Day weekend…
JOBS will be all the rage this week, as President Obama and Mitt Romney both unveil extensive plans for creating jobs and rescuing the economy. Also, Fed Chairman Bernanke will give a speech on Thursday (same day as Obama’s address).
DOOM AND GLOOM? While U.S. markets were closed for the holiday, international markets continued to slip – WSJ’s 4-column headline “Europe Signals Global Gloom” says it all.
WITH THE 9/11 ANNIVERSARY fast approaching, the media will undoubtedly feature round-the-clock coverage of where we stand at the ten-year anniversary. At Inside Track, we remind you to say a prayer this week for the families and friends of the victims and to keep it all in perspective – there are some things that are bigger than the news.
MBIA Inc., the Armonk-based bond insurance giant, will face off with BofA-owned Countrywide Home Loans in the NY State Supreme Court later this fall; later this week we’ll tell you how big the implications will be for the insurer and for the country’s largest bank in the wake of the subprime mortgage crisis. HINT: BofA execs have billions of reasons to be worried.
Here’s a quick recap of the week that was, before I have to skiddadle (yes, that is a word) and hurricane-proof the house.
- Westchester job prospects improving: The county’s unemployment rate dropped to 6.7% in July from 6.8% in June and from 7.3% in July 2010. The reality is that Westchester likely won’t see monthly a decline of more than 0.1 or 0.2 percent in the unemployment rate until at least 2012. However, by all accounts, this month’s jobs report was one of the best signs Westchester has received in some time.
- For the complete story on the county’s employment picture, visit us online!
- National outlook takes a shellacking, but no panic: New-home sales dropped, consumer confidence fell significantly, and the U.S. revised its initial 2Q GDP growth rate down to a measly 1% from earlier estimates of 1.3% growth (admittedly, pitiful either way).
- The glass-is-half-full take on everything we witnessed this week: the markets did not panic. Even though Fed Chairman Bernanke didn’t signal a new round of bond-buying as was hoped for by much of Wall Street, the markets still ended the week on a high note. Consumers are looking for anything – any sign – that the economy is recovering. Seeing the market perform well this week despite some discouraging news is in and of itself an encouraging thing for consumers.
The Westchester County unemployment rate in July dropped to 6.7 percent (down from 6.8 percent in June), the state Dept. of Labor announced yesterday.
Here are a few nuggets from the report:
- From July 2010 to this past July, private sector jobs grew at a rate of 1.9 percent. Compare that to the period from July ’09-July ’10, when the private sector contracted by 0.1 percent. Big shift? Absolutely.
- July is typically one of the slowest months for hiring, and we still saw a drop in the unemployment rate.
- Growth came across four of the major industry sectors (Trade/Transportation/Utilities – 1,200 jobs over the past year; Professional and Business Services – 2,000 jobs; Private Education and Health Services – 2,600 jobs; Leisure and Hospitality – 5,000 jobs). Diversity is always a good thing.
(For more on the Westchester employment picture, pick up the Aug. 29 issue of the Westchester County Business Journal or check us out online at Westfaironline.com)
Here’s a look at what will be driving news in the coming week:
JOBS JOBS JOBS The New York Dept. of Labor announced that the state added 29,400 jobs from June to July, with 14,100 of those coming in the private sector (with both numbers increasing at a faster rate than national economy). With strong private job growth in Westchester, particularly in the professional services and hospitality sectors, look for local unemployment rate to drop when it is released later this week.
BACK-TO-SCHOOL SURGE? Retail expert says that consumers are “scared out of their wits” and that retail is “in a catastrophe state.” Ominous sign for retailers hoping the back-to-school shopping season will boost revenue? See Kelly Liyakasa’s story for more.
MARKETS LOOK TO REBOUND Markets posted a strong opening on Monday morning, as investors look to move past H-P’s struggles and European uncertainty. Look for another up-and-down week on Wall Street.
WHAT NO ONE ELSE IS TALKING ABOUT Newspapers, led by USA Today publisher Gannett Co., are struggling and have seen lower advertising revenue across the board so far in 2011. See the WSJ story here.
DUE OUT THIS WEEK Stay posted for two major economic indicators, as the U.S. releases July new home sales numbers tomorrow and its second 2Q GDP estimate on Thursday.