Short-Term Key: Negative Long-Term Key: 0
The end of last week brought two important announcements, both of which are relevant to our investments, though not terribly cheerful.
The first of these is the latest report on employment from the Bureau of Labor Statistics. It could not have been worse. The horrific details included a larger than expected decline in employment, both in terms of payroll data and household surveys. Unemployment is nearly 10%, if you don't include people who are underemployed or who have stopped looking for work. (If you do include them, the rate could be closer to 17%.)
You may recall that, back towards the middle of this year, everyone was talking about positive second derivatives. This is a nifty bit of calculus/desperation that claimed that, while things were getting worse, they weren't getting worse as quickly.
Unfortunately, Friday's employment report was clearly a negative second derivative. Not only were the numbers worse than expected, they were worse than the previous month's. Whatever forward momentum the economy has, if any, seems to be much less than previously thought.
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