Problems of the U.S. economy pressured USD rate today

Dollar declines, statistics upsets bulls

In brief: The dollar is losing ground in a volatile U.S. stock market and the loss of the fulcrum against the euro.

Exchange rate USD weakens against the bad statistics. So, the data of the U.S. employment could significantly move the markets, which have demonstrated large-scale movements as early as Thursday, but added food for thought. Total U.S. economy in June, has lost 125 thousand jobs vs. -130 thousand, the unemployment rate fell from 9.7% to 9.5% against the forecast growth to 9.8% (these data, as well as all that will be lower, are seasonally adjusted).

At first glance, these are excellent. But while the public sector lost 208 thousand jobs (laid off part temporarily hired who participated in the census), and the private sector added 83 thousand jobs. Data on the private sector was worse prognosis, 110 thousand, besides, the data for May were revised from 41 thousand to 33 thousand, so Friday’s statistics can be regarded as unambiguously bad (in the census does not make sense to look at the basic rate of Nonfarm Payrolls ). It makes no sense to look at the unemployment rate, as it now reflects the fall in the first place, reducing the number of officially unemployed in status (for a month with 14973 thousand to 14,623 thousand), but this drop is due to the fact that people are frustrated find a job, and not actively seeking it, are not considered unemployed, and even excluded from the economically active population. Last month, the economically active population fell from 154,393 thousand to 153,741 thousand (another reason to reduce it – is to leave people to retire). At the same time the sheer number of employees (there is already including the agricultural sector) has fallen for the month with 139,420 to 139,119 thousand other words, the number of unemployed has fallen, despite the drop in the number of employees, which unequivocally shows that the reduction in unemployment is due to transfer about 300 thousand people the category of “desperate”, and about the same spent on pensions. Retire and have lost hope of finding work are included in the population, not included in the labor force, that is “economic ballast. This figure has increased over the month from 83,107 to 83,949 thousand how radically deteriorated labor market crisis, you can see by comparing it with the pre-crisis values. In February 2008, the number of unemployed stood at 7381 thousand in the U.S. When Obama speaks on the growing number of unemployed at 8 million for the crisis, he has in mind is that the growth rate (currently, we recall, 14623 thousand). But this figure does not take into account that part of the population for the crisis had lost hope to find a job, dropped out of the workforce, if at all to make marginal. Indicator “economic ballast” (Not in labor force), in February 2008 was at the level of 79,436 thousand (now recall 83,949 thousand).

There is an increase of 4.5 million mostly, he reflects, of course, not so much growth desperate to find a job, how much growth in the number of pensioners (although the economically active population in February 2008 was 153,374 thousand, then there was even less than now), and may even reflect the increase in the number of minors. But the number of employees in the U.S. economy in February 2008 (including the agricultural sector) amounted to 145,993 thousand, then there were only 6.9 million fewer than in June this year. However, there is one significant factor – the average search time work has reached in June this year, the absolute maximum from the beginning of the crisis on the level of 35.2 weeks. However, in February 2008 index was at 16.8 weeks. Thus, any optimism about the state of U.S. labor market experience is not necessary. Perhaps the situation will only worsen as the exhaustion of the effects of stimulation. Today on the U.S. markets off on Independence Day, more traffic is anticipated. In connection with the past, the euro analytical bands began to change the tone somewhat, saying that investors’ concerns about the ongoing crisis in the sovereign debt of the euro area weakened, and the data on the U.S. economy deteriorates, and the transition pressure on the dollar. However, in our opinion, this is a temporary trend. Once the Euro starts to fall again in the media once again talking about a slowing euro-zone growth, which will be due to tightening fiscal policy.

Anrey Torbinski
2010-07-05 15:28, Economics.

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