Wall St Sinks After Weak Job Data (467,000 jobs cut in June)

[debbierlus]

Source: AP

NEW YORK (AP) -- Stocks fell Thursday morning after a new report showed more job losses than expected in June.

Major stock indexes were down about 2 percent after the U.S. unemployment rate hit a 26-year high. European markets were also down following similarly disappointing data on unemployment in the 16 countries that use the euro currency.

Recession-weary employers in the U.S. cut 467,000 jobs in June, the Labor Department reported, far worse than the 363,000 that economists expected and a grim signal that the path to recovery will be bumpy.

The jobless rate, meanwhile, rose to 9.5 percent last month from 9.4 percent in May. Economists had predicted a rate of 9.6 percent.


Read more: http://finance.yahoo.com/news/Stocks-fall-as-June-job-a...

---

What recovery?

Near another 1/2 million jobs cut and they talk recovery. I see no signs of job creation. Without jobs, it doesn't work.

We are falling off a cliff. And, we have a LONG way to fall.

This is awful.

[high density]

1. hmm, in the past Wall St has been rallying on more job losses

I suppose the idea of fewer consumers being out there to buy crap from these corporations is finally sinking in.

[debbierlus]

3. Yeah - they might just be starting to understand the basic premise of a consumer society

You need buyers.

Buyers need money to buy.

Buyers need a source to obtain the money to buy.

Jobs are the source for the consumers to obtain money.

No jobs, no money for the consumer to spend.

No money for the consumer to spend, no profits for business.

No profits for business, no profits for for stock holders.

No profits for Stock Holders, Wall St collapses.

They may be the most insulated and they may have been given a temporary reprieve with the trash for cash banking scandal, but that is now over.

And, they all fall down.

[Lucky Luciano]

4. When there is very low unemployment, an unexpected

decrease in unemployment could mean the economy is overheating and that interest rates would be raised and the market would go down. When unemployment is very high, an unexpected decrease in unemployment would mean the consumer gets stronger and the market will go up. Somewhere in the middle is an inflection point where the same size unexpected moves in unemployment might have little affect on the market.

[hugo_from_TN]

20. Ridiculous - the market never rallies on job losses.

[high density]

22. You haven't been paying attention for the last few months I guess. NM

[TheWatcher]

25. There is very hard data that suggests otherwise.

Go to yahoo finance and do a search of of the Dow History on the dates Unemployment reports came out in recent months and get back to us.

We'll see how ridiculous it is then.

It doesn't ALWAYS do that, but to say it never does makes you look foolish.

get your head out of the Propaganda and figure out what the Hell is going on.

[hugo_from_TN]

28. Two points I'd like to make

First, sometimes the job numbers are bad, but are better than what was expected. In that case, the news can certainly contribute to a market rise.

Secondly, the market moves based on all sorts of news, jobs being one piece of the puzzle. If worse than expected job numbers come out, but some other news is seen as more significant (A large bank being able to pay back TARP), the overall result could be positive or negative.

I have never heard of, and can't imagine why, the market would increase solely on a jobs report that shows more job loss than expected. The vast majority of companies on the US stock market depend directly or indirectly on consumer spending, which is hurt by rising unemployment.

[TheWatcher]

54. Then you are not familiar with how manipulated and rigged the so-called "Markets" are

Few Americans are.

You should look into it.

You would not like what you see.

Better yet, Read Stock Market Watch on DU everyday and learn lots.

You think you know how things work.

20 years ago I used to, too.

UNLEARN.

And then Learn Again.

[riverdeep]

64. "I...can't imagine why (markets would rally on job losslesses)"

The theory is that labor is looked at as a liability, they eat up profits by demanding things like money for food. So getting rid of labor temporarily increases profits, and the investors are happy. Because it's all about the quick buck.

Of course when this happens to enough people, the economy within which that business is ultimately based crumbles, but who could have seen that coming?

[nc4bo]

62. Dude - they've been emotionally overwhelmed nearly every single time bad job numbers are announced

Absolutely ecstatic beyond all rational thinking to us Main Streeter's.

If you pull up some of the older SMW threads on LBN, you can see that there are plenty of others who noticed Wallstreet's joy when more Americans have been put out of their jobs.

It's obscene.

[ddiver]

2. How many jobs were saved?

[No Elephants]

6. Most jobs at huge financial institutions.

[Lucky Luciano]

11. HAH! The financial industry was one of the hardest hit!

The layoffs there have been brutal!

[Romulox]

14. $10 or $12 TRILLION taxpayer dollars has a way of cushioning the blow!

Citibank is set to give out 50% raises to its people (with taxpayer dollars, naturally).

[Lucky Luciano]

21. The 50% raise in pay is still a huge paycut from

total comp because bonuses will be shyte.

The $12T is not entirely cash given to financial institutions. Most of it is the guarantees on liabilities at the banks. For example, Citi has about $300B in guarantees on their liabilities. The value of the guarantee is not really $300B though unless Citi is forced into default and the government has to honor its guarantee. That probability of Citi forcing the government to use its guarantee is relatively low right now though. You might say that the value of the guarantee is equal to $300B time the probability of a Citi default.

[Old Hob]

26. I wonder what the june numbers will be in July after they get "adjusted" nt

[Alcibiades]

5. They should be happy

And snatching up as much stock as they can! After all, when an individual company announces layoffs, they are cutting costs, and therefore become more profitable. Should work for the entire economy too, no?

[Seen the light]

7. Can we now say the stimulus isn't working at all?

I have seen no improvement whatsoever. As the weeks and months drag on, I have seen things only get worse and worse when it comes to the job market. I assume I'm not the only one.

[debbierlus]

8. Of course it isn't working, they directed the money to the corporations instead of the people

They placed the debt of the banking industry on the backs of the people. Trillions were spent in propping up this broken system (which is still just as broken), and mere crumbs were thrown to the people.

The money needed to be spent on infrastructure, and increasing employment in very much needed social programs.

It wasn't. It was basically just stolen by the banks, in a TEMPORARY bid to stave off their failures.

Nothing was solved.

Watching Obama basically implement Paulson's trash for cash program and witnessing the people just forget about it, it has been surreal. I don't think most people understood this mass theivery of the American people facilitated by Obama's man Geithner. If they did, we would not see such high approval ratings of Obama.

It is beyond disheartening.

[razorman]

13. I read somewhere that the mortgage bailout was equal to 90% of

the outstanding home mortgages in the U.S. In other words(if this is true), instead of using the funds to prop up the big financial institutions(who contribute campaign money), they could have sent each of us a check that would almost pay off our mortgages. That would certainly free up some funds for folks to stimulate the economy with.

[SoCalDem]

58. They should have "re-set" ALL mortgages at 4%, for a 5 year period

and mandated that instead of foreclosure, the inhabitants should have been offered a prevailing-rate RENT, month-to-month, until that house was sold...escrow would have given them plenty of time to find a different place to live.

and student loans should have been "frozen" in place (no penalties/interest) while a person was unemployed.

[SkyDaddy7]

10. To start...

The stimulus needed to be much bigger! However, there was not the political will to pass a larger stimulus bill. Another thing to keep in mind was the argument that much of the stimulus was aimed at later this year and next year...I have no idea if this will end up being true?

I think the stimulus bill will help but it was simply too small...I just watched Paul Krugman on Charlie Rose and he said the same thing he said when the stimulus bill was past, "IT WAS TOO SMALL"

If unemployment is 10% or higher come November 2010 the Repugs could make a come back and that would really screw shit up! That is what they were betting on by voting NO on everything Obama proposed...I hope they lose that bet!

[Romulox]

12. Salaries are up at Citi, AIG. Missiona accomplished! nt

[Psephos]

23. This graph says it all

[Selatius]

55. Funny that graph. We've pretty much already hit 9% with the recovery plan instead of without.

They cooked their numbers much.

[high density]

60. Bush's job projections for the tax cuts were way off too

We didn't even come close to their "without tax cuts" forecast. Much worse so far than anything Obama's team has projected so far.

I think it does show though that we needed $2 trillion of stimulus and not $787 billion.

[seabeckind]

9. Hey, what about that "global economy"?

and competing in the world? You know, all those buzz words they used during the raygun years to justify outsourcing and moving factories to the third world?

And don't we need more H1Bs cause our people are a bunch of dumbasses and don't know how to keep up in a fast changing technical environment? Afterall, our chillens kaint larn.

How about we quit dumping stimulus money into the same holes that got us into this mess? My local area is fixing potholes and spending $135000 to test a conversion of a truck to electric or some nonsense.

How about we start making things again? I'm sure with enough training there's someone in this country who can figure out how to sew a shirt together.

[riverdeep]

63. But that isn't part of the 'new economy'.

We were told in the nineties that the new economy was all about using your mind, not your hands, oh, and the service sector.

The fact is, this country needs manufacturing jobs, for a lot of reasons. Not everyone can or, just as importantly, WANTS to work primarily with their mind. Also, security is an issue. When China is making your parts for weapons, what's going to happen when relations sour? What's going to happen if any nation decides they will no longer manufacture a critical part?

But according to our overlords, people in this country are spoiled. We want to not be poisoned by our workplace, we want to have overtime if we work more than 40 hours, we want some kind of safety standards, we want to be able to live in something other than a hovel. Well, the people in other countries don't mind that stuff, or at least they can't complain if they do- and that's the same thing as far as the elites are concerned.

[Deja Q]

66. Fuck that shit. I want to work with my mind and I can't get anywhere (in the job market, *cough*)

Being in a menial job is tantamount to gitmo.

That's why we have social lifes; a form of escape from 9-to-5 daily gibber, I suppose.

[Deja Q]

65. Okay, while from personal experience I know a lot of the H1Bs are sheer idiots, not all are.

I know some, who are also idiots, will brandish me as a racist at every turn (note to you: fuck off), but the truth is - not every H1B is a racist and not everyone in America is bright.

The only truth might be this: Is everyone being played for as chumps?

[ozymandius]

15. Well, of course, the rational course of action is to give more money to the banks.

That will fix everything.

[mule_train]

16. and increase foreign workers

http://www.democraticunderground.com/discuss/duboard.ph...

[HughBeaumont]

17. Kind of makes you wonder . . . what has to happen FIRST?

Do the consumers have to start spending again, or do corporations need to stop FIRING? Is one side simply waiting for the other side to make the first move, or is the country going to turn into one big Northeast Ohio before either one happens?

News flash. Unemployed, foreclosed, homeless and destitute people . . . can't and don't buy stuff.

Underemployed people . . . don't buy stuff.

People scared of losing their jobs . . . don't buy stuff.

People uncertain of their job and company status . . . don't buy stuff.

Why are they not buying stuff?

Simple. Thousand-plus layoff notices are happening DAILY, not just weekly. Layoffs only lead to more layoffs, which leads to no one (not even employed and scared people) buying stuff, which leads to more layoffs, etc.

Sooner or later, corporations, you're going to need this little thing we in the reality-based community call "BUSINESS".

AAaaaand, you can't GET business if no one's BUYING stuff, because they can barely afford the cost of living and are scared of getting fired. Or, worse yet, they're already fired and can't afford to buy anything; multiply this by 14.7 million, and you have a ginormous problem on your hands.

http://journals.democraticunderground.com/HughBeaumont/...

[Old Hob]

27. Might as well be shouting at a brick wall. We've been telling them this for years they don't listen.

nt

[Romulox]

Dupe. nt

[Romulox]

18. But I was so sure that Trickle Down Economics was going to work--this time! nt

[AnneD]

19. I guess we won't have a jobless recovery this time......

If we really ever fully recovered

Out with Tim Geitner and Larry Summers and in with Elizabeth Warren.

[Old Hob]

24. summer months tend to be better than winter months as far as employment goes too.

lay offs start up shortly before Christmas. just in time to exacerbate the high costs of energy during the winter.

[Amerigo Vespucci]

29. Broader Unemployment Rate Hit 16.5% in June

Source: The Wall Street Journal

As job losses accelerated in June, the unemployment rate ticked up 0.1 percentage point to 9.5%, the highest level since August 1983.

But another more comprehensive gauge of unemployment also continued to tick up. The government’s broader measure, known as the “U-6″ for its data classification, hit 16.5% in June, 0.1 percentage point higher than March.

The comprehensive measure of labor underutilization accounts for people who have stopped looking for work or who can’t find full-time jobs. The index had posted a 0.6 percentage point jump in May. The pace of increase has begun to mirror the rise in the headline rate after soaring at higher pace earlier this year, possibly signaling that more workers are starting to look for jobs again.

Though the pace may be moderating, the figure still is the highest since the Labor Department started this particular data series in 1994. It’s also above a discontinued and even broader measure that hit 15% in late 1982, when the official unemployment rate was 10.8%. (That data series goes back to the 1970s.)

Read more: http://blogs.wsj.com/economics/2009/07/02/broader-unemp... /

[GreenTea]

30. The fucking WSJ certainly didn't report this "broader measure" when Bush was losing millions of job

because of the fucking republican outsourcing and corporate policies & agenda...fuck the workers, subsidize corporations....which put us in this fucked up economical mess we are in today....But the slimy republicans will never accept any blame only point gingers at the Democrats...

But this is the asshole Murdock of Fox news who also owns the WSJ.

[hugo_from_TN]

31. I've seen it reported over the years.

[defendandprotect]

33. We need to overturn those trade agreements and hasn't Obama turned from that???

[Amerigo Vespucci]

34. I recall hundreds of posts on DU during the Bush years...

...in response to monthly unemployment numbers, which generally said something like "These numbers don't represent the whole picture. What about the people who have stopped looking for work? Add them in and the figures are closer to XX%..."

So yes, now that Obama is President, let's make sure we turn over every rock and expose every detail and show people how bad things REALLY are.

Damned liberal media!

[panAmerican]

39. Explain this to me.

I don't understand the people who are too "discouraged" to look for work. How do they eat? Pay their bills? The very idea is so foreign to me. I just don't get it. I'm a naturalized citizen who's been here since before I was a teenager, but I just don't see that kind of discouragement translate into inaction in the immigrant communities I'm familiar with.

If we are counting those whose parents cover their cost of living, or drawing from savings instead of continuing to look for work, I think it's a mistake.

On edit "...I think it's a mistake to consider them unemployed."

[Amerigo Vespucci]

40. I don't understand it...it's a luxury I don't have as a business owner

I have a book titled "Lessons Learned From 100,000 Cold Calls." In the introduction, the author shares everything he has learned about sales and cold calling:

"If you don't sell, you don't eat.
If you make enough calls, you will make a sale."

Until mid-2008, I never really had a problem with business coming to me, through referrals from friends and satisfied customers. Then things changed. Now, I spend a L-O-T of time prospecting, making sales calls, going after business. I cannot sit there and think "Oh, no, we're in a recession, no one's buying."

Because they ARE buying. You just have to work ten times harder to get to the people who are. And I am willing to do that, so I get the business.

I don't know how the "discouraged" people pay their bills. I have a niece who is an expert on gaming the system, who claimed a fake disability at a very early age and has never worked a day in her life and who OWNS a house in Colorado Springs. She's never missed a meal and all of her bills get paid and she doesn't lift a finger to make that happen, other than scamming the system.

Then there are people who move back in with their families. I read a CNN story recently about a guy who moved in with his ex wife and her new husband because they got along and decided that three people with low-paying jobs could make ends meet better than two, or one.

Then there are the people who drain their next eggs, max out their credit cards, sell their personal belongings, deal drugs, steal...it's a wide spectrum. But many people hate looking for work in the best of times. They send out a couple of resumes or make a couple of phone calls or go to a job fair and if they don't find the dream job right off the bat they give up.

I don't know what other people are doing...I just know what I'm doing, and it's called "working my ass off."

[panAmerican]

45. You're right. Some people have the hustle instinct, and some don't

Even though we've been in the US over 2 decades, we still send money "back home". As bad as things are here, it's much worse elsewhere in the world. So that gives me hope we can come out of this, however difficult the process may be. Despite the jokes about immigrants who work 2 or 3 jobs, they do whatever they can to keep the cashflow going.

[riverdeep]

59. No, it's not as bad in all parts of the world.

Yes, the economy has affected all parts of the world thanks to globalization. But some economies are worse off than others. Those who took the Milton Friedman/Ayn Rand free markets lead to free minds bait, are the ones who got hit the hardest. Iceland is an example. Milton Friedman held a series of debates there that led to the wholesale adoption of his principles by an enthusiastic gang of influential Icelanders, and this year they went into the toilet.

Countries like Norway, which according to the cries of the Republicans should have zombies roaming the streets, are weathering the storm. They have an unemployment rate lower than ours, even though taxes and social spending are far greater. That certainly isn't the only factor, i.e. increase social spending and all will be well, they also have an oil rich economy and invest the revenue into a fund for the future, the banks and financial sector play a minimal role in wealth creation, and they have a general outlook of needing to pay for things before enjoying them. And possibly most important, they have an outlook of seeing what's best for the group, rather than exclusively the individual, and also set up incentives for the long-term rather than short-term.

Their economy has also been affected, but it's not a disaster like here and elsewhere.



http://mjperry.blogspot.com/2009/05/norways-economy-is-...

(for fun, check out the comments at this site, they are still clinging to Milton Friedman any way they can)

[Yavin4]

46. You Have A Saleman's Perspective Which Most People Don't Have

I visit a lot IT msg boards, and as a rule, ITers simply do not have that saleman's mentality. ITers were trained and judged based on the mastery of their discipline. They didn't have to build relationships. They didn't have to make cold calls, etc.

Now, they're being forced into doing these things in a horrific job market, and they're not use to failure. Failure to you may not be a big deal. Failure to them may be catastrophic so they're less inclined to keep looking.


That's where the discourage worker stat comes from.

[Amerigo Vespucci]

47. I hear exactly what you're saying...

...and the salesman mentality became learned behavior for me, over time. It's a daily, ongoing reprogramming / brainwashing that says "If I make "X" number of calls today, either in person or on the phone, and every one of the people I talk to says "NO," it's not "failure," because I did exactly what I committed to do when I got out of bed this morning, which was to contact those people."

Before I started my own business, I spent a little more than half of my career in IT environments, and you're right. It was a matter of "I learned this discipline or programming language, I can write this code or execute this program, I know my stuff, I'm good at what I do, that covers everything."

And one of the hardest lessons I've learned in my career as a whole is that your level of skill and dedication to becoming excellent in your chosen skill is only part of the equation.

There have been many, many times when I've been wearing the "salesman's hat" and thought, in exasperation, "THIS ISN'T MY JOB!"

Then I take a deep breath, relax and realize that it is. On some days, it's the whole job.

[riverdeep]

61. Maybe you didn't intend this, but the thrust of your post seems to say

that those who are bad off are simply lazy. And that those who receive benefits are probably running a scam (welfare queens?).

But it IS discouraging, on a variety of levels. I have a remarkably good job now, but when I was out of work, looking for work WAS my full time job. And it was really exhausting, especially mentally. I was also more than willing to look for positions 'beneath me'. But no one wanted to give me a chance on those positions because they feared I would just leave. I only allowed myself a set amount of time to dwell on the anguish, because I was literally in a survival situation and sinking into depression could have pulled me into a spiral I would find hard to recover from. I just didn't have the luxury of getting depressed. But man, it was right there on the edges all the time. I can easily see how people succumb.

And then you look at the people who are making off like bandits, the CEO's, the politicians who think we have all the time in world, how the last eight years have seen a massive transfer of wealth to the top, etc., it just piles on to the discouragement.

As for how I lived, I didn't qualify for any benefits, I lived mainly off my savings, selling off what I could, a few generous people, cashing in an investment, doing odd jobs, and a tremendous amount of luck.

While giving practical advice on how to deal with this situation now that we're in it is fine, the focus needs to be on who actually caused this, and it isn't the people in Ohio or Michigan or elsewhere with double digit unemployment rates.

[Psephos]

41. I've always seen the U6 numbers in the business press, regardless of who's president

The WSJ is like any other source - you factor in its bias, then extract what's useful. There are no unbiased sources. Zero. Never were.

Look at the stats. (You can find them here: http://www.bls.gov ) * didn't "lose millions of jobs." He failed to create any (the "jobless recovery"). In other words, he presided over a concentration of profit and wealth in corporate hands, without ensuring more of it made its way into private hands, and more pointedly, into middle-class hands, as the economy recovered and expanded.

The idea that Obama is "losing jobs" is a misnomer as well. It's the US economy that's losing jobs. This notion that the President has godlike unitary control and makes or breaks the economy by snapping his fingers is, to put it mildly, intellectually lazy. In practical terms, the legislature owns more responsibility than the executive over the health of the economy. But ultimately, the performance of the economy depends on all its players far more than upon the government.

I wince when I see simplistic blame/credit shoved onto Presidents. We cannot solve problems if we don't understand what causes them. As the Sufi saying goes, when a wise man points at the moon, the fool looks instead at his finger.

[KamaAina]

48. That'd be the same WSJ that believes Franken stole the election!

Seriesly.

http://www.democraticunderground.com/discuss/duboard.ph...

[defendandprotect]

32. I'd say we were at 16% long, long ago -- the statistics have been junked as badly

as our Global Warming information coming out of right-wing government --

Who could guess what it really is . . . ??

25% or more???

We've also been replacing secure, higher paying jobs with jobs which pay less

and offer less benefits.

Like taking down redwoods and replacing them with 2 year old birch trees!

[KillCapitalism]

44. It has to be at least 25-30% here in my area.

St. Louis, MO

All jobs are scarce. A guy down the street from me is unemployed & is mowing lawns for money, that's what he's having to do to survive.

[defendandprotect]

67. That would be my estimate --

the only difference from the Great Depression was that when 25% of them were

out of work, they were the sole breadwinner with families dependent upon them.

These days, almost everyone in a family works -- often at more than one job.

They have to get these statistics unscrewed.

Also -- I think they stopped counting armed forces in that -- in other words . . .

they're never going to bring them home!!!

All the "they's" are Repugs, naturally.

[robcon]

35. Overturning free trade agreements would be a disaster for American workers

Ever hear of Smoot-Hawley? Ever hear of the Great Depression?

[PSPS]

36. Apples and oranges, to say the least.

What we have now is nothing like then. We have essentially no tariffs anymore.

[brentspeak]

43. Ever heard ot the fact that back then the U.S. was the world's largest creditor?

But that today, the U.S. is the world's largest debtor?

Smoot-Hawley would not be relevant today.

[OhioChick]

49. What do you expect from robCON

DU's cheerleader of free trade and outsourcing practices.

[ProudDad]

69. No Shit... Gotta put this robcon clown in my ignore list (n/t)

[Psephos]

52. That actually was true just 25 years ago n/t

[ProudDad]

68. Oh, God. Not you again!

There's no such thing as a "free trade" agreement...

They are free investment agreements that allow capital to move where it wills -- but labor, no fuckin' way...

Take your "free market" bullshit, fold it 7 ways and put it where the sun don't shine....

[Mari333]

37. and how much are we spending on 2 inane occupations?

[ProudDad]

70. And that's just the direct pentagon "spending...

Don't include the wars...

Don't include the debt payments for the last 35 years of the war machine's adventures...

With supplementals and hidden budgets and interest payments it's probably closer to 1.5 or 1.6 TRILLION $$$ JUST for FY 2008/2009...

War is a racket:

http://lexrex.com/enlightened/articles/warisaracket.htm

WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small "inside" group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

[OhioChick]

38. It's just a good news day....

[high density]

42. What we need are more H-1B visa holders

That's the ticket!

[Joanne98]

50. Since when has the WSJ cared about the REAL unemployment rate?

I don't remember them EVER quoting it before!

[Stuart G]

51. Ok. 16 percent...That is one in six............think about it....one in six..nt

[New Dawn]

53. And the real number is even higher, because...

They do not count those who have given up looking for work for over one year. Not counting them was something new that began in the 1990s. Keep that in mind when you see comparisons to older unemployment figures.

[riverdeep]

56. If you're referencing post 29, then it does mention that...

"But another more comprehensive gauge of unemployment also continued to tick up. The government’s broader measure, known as the “U-6″ for its data classification, hit 16.5% in June, 0.1 percentage point higher than March.

The comprehensive measure of labor underutilization accounts for people who have stopped looking for work or who can’t find full-time jobs."

[natrat]

57. looks like obama's trillion dollar giveaway to the banks sure is helpinjg people

fucking crooks