U.S. Economy: Turtles All the Way Down
"Less devastating" is President Obama's description of new Labor Department unemployment figures that massively exceeded expectations. Some 467,000 jobs vanished in June, according to the Bureau of Labor Statistics. That figure was well above the 350,000-363,000 job losses guesstimated by economists, but it was quite close to the 473,000 figure calculated by Macroeconomic Advisers, LLC in its ADP National Employment Report [pdf].
Calculated Risk notes, once again, that the unemployment figures have blown through the "more adverse" scenario envisioned in the first of the so-called bank stress tests. The financial markets are in the process of giving up a non-trivial portion of their second-quarter gains — a slightly unusual pattern for the pre-Fourth of July period. (CNBC calls it the "single worst day before the long Fourth weekend in more than a century," for all you economic sabermetricians out there.) Will any news be coming after the holiday to indicate economic activity is increasing, or decreasing at a decreasing rate, in these here United States?
Obama economic advisors Christina Romer and David Axelrod both downplay but do not dismiss the possibility of a second stimulus package. Meanwhile, paying for the first stimulus package is getting easier, as 10-year Treasury yields drop to 3.49 percent. The Department of the Treasury will be borrowing new piles of money next week, and China is reiterating its call to replace the dollar as a reserve currency. Disgruntled goldbugs (ain't they all disgruntled?) may enjoy this headline: "China, Dollar Vie for Gold Standard."
