June’s employment report is not so good, smells like recession and…QE3 coming?
There was nothing good in June’s job report released this morning. The unemployment rate inched up to 9.2% and the economy added about 18,000 jobs for the month. And what’s that odor in the air?
It’s the foul stench of recession:
The U.S. economy generated just 43,000 jobs in the last two months, perhaps taking the world’s largest economy skating closer to recession territory.
It was difficult to find a bright spot in the U.S. Labor Department report. Many key labor market signals deteriorated, and the jobless rate rose unexpectedly to 9.2 percent even though the work force actually shrank.
Shaun Osborne, senior currency strategist at TD Securities, summed it up: “The number stinks.” Watch for forecast revisions to second half U.S. gross domestic product.
The Obama administration has run out of silver bullets, as the Democrats perverse experiment with Keynesian economics has failed miserably.
So what to do? The experts are leaving the door open for the Fed to fire up the printing presses again:
[The Labor Department’s report] could raise questions about whether the Fed should take additional actions to support growth.
Yes. Because it’s worked so well with QE1 and QE2.
Politically, the Obama
campaign administration has got to be in full panic mode now. Time is of the essence, but even over a year away from the election, the economy will have to show some strong monthly employment gains to bring that rate down. Some broad tax cutting would be in order to accomplish that, along with some bold moves to cut spending. But I wouldn’t bet on that coming from this White House.
Speaking of panic, the President is holding a press conference to speak about this morning’s employment report at 10:30 this morning.