Unemployment Rate Continues to Rise

Despite the optimism seen on Wall Street after four straight positive weeks, reality struck back with the analysis report of March unemployment rate. In March alone, U.S. employers cut 663,000 jobs raising the U.S. unemployment rate to the highest level since 1983. This news is a big damper on the overall thoughts that the Economy was beginning to stabilize. The fact is that the unemployment crisis will only continue to worsen. The downturn, which started in December 2007, appears to be on track to surpass the two longest recessions since the Great Depression. Expect the unemployment rate to rise and pass 10% in the next coming months. Most recently notable companies like Disney (DIS) and AT&T (T) have announced large job cuts. U.S. officials are counting on the government’s fiscal stimulus package to start kicking in by the second half of the year. Hopefully that will be a big enough stimulant to lead a resurgence in the job companies and allow companies the flexibility to take on large staff. Production is starting to pick up as well which could be another stimulant. This jobs report was a shock as most recently most signs pointed towards an overall stronger global economy. In the U.S. alone, an increase in housing demand and a rebound in consumer spending after sharp declines since the fall fueled some hope that the economy may be approaching its bottom. Economists generally expect job losses to continue through most of the year, with a firmer recovery starting in early 2010. Friday’s job report showed that every sector of the economy shed jobs, except for health care. My thoughts are that we are still in the heat of this economic crisis and the release of the jobs report was that slap in the face Wall Street has needed the past month. In March and the beginning of April people acted as if economic levels were normalized with free will trading on the open markets. This report should affect Wall Street and should end the continued positive gains leading into next week.

Government Controlling the Economy

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