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The U.S. gained only 69,000 jobs in May, according to the Labor Department. Economists had been expecting 165,000. The May gain was the smallest jobs increase in a year. April's gain was revised down to 77,000 from 115,000 and March was revised down to 143,000 from 154,000. The unemployment rate rose to 8.2% from 8.1% in April. People re-entered the workforce, but employers weren't hiring them. Economists now seem to be realizing that the economy is weak; the talk of a pickup was far too optimistic. The numbers are clearly bad for President Obama.

Stock market futures are down sharply this morning (June 1). However, that may change during the day and subsequent days. There are few actual INVESTORS in the market now. Retail customers have been dropping out for some time. The stock market is almost totally dominated by high-frequency traders, bank trading desks, hedge funds and the like -- essentially, institutional day traders who buy one minute and sell the next. These traders generally respond to liquidity, not the status of the economy, and can be manipulated by the Federal Reserve. So expect the Fed to pour in more liquidity or at least talk of doing so in the future, thus inducing salivation from the gamblers, Pavlovian style. The Fed has no mandate to manipulate the stock market, but has been doing so since 1987.

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