Jobs, Jobs, Jobs! Where are they? Obama promised that all the stimulus of the QE 1 and QE 2 would create jobs by injecting more liquidity into the banks for them to lend out. The only thing that has happened is that the dollar has devalued increasing some exports, but costing us more for imported items such as oil and food. The other portion in regards to the banks lending out more money has not happened. One major reason is that the banks have a larger requirement of capital. Meaning the banks are holding on to the extra liquidity.
The capital that was to be lent to businesses is not and thus companies are still not hiring. The jobs report last week came in at 18,000, when the number expected was nearly 10X that amount. Even with the disastrous jobs report the markets have held up remarkably well. It is baffling to see the markets hold up with the economy looking as if a double dip is more than possible. Obama is pulling out every bit of rhetoric he has in his arsenal to try to keep him in the spotlight for a re-election hope in 2012.
The Obama administration still continues to blame the Bush administration for the current problems we face. This is after Obama threw $2,000,000,000.00 at the problem and appears that none of it has helped. We are still at a 9.2% unemployment rate.
Things seemed to calm down a bit on the Greek front, but Europe is still an financial cauldron ready to boil over if one of the troubled countries (Ireland, Portugal, Spain, Greece, and now Italy) default on their debt.
The US is still playing the game of chicken with the debt ceiling as our August 2nd deadline looms. If the US defaults on its debt (highly unlikely…we just have to see how they will play the game), it would have worldwide reverberations. It would be difficult for other countries, or domestic monies to want to fund the debt of the US.
In the economic world Monday holds a bit of a breather for us with no major economic reports due out.
Tuesday will give us the FOMC minutes. It is doubtful that anything market moving will come out of the meeting. If they try to raise interest rates, it will put the US in a worse situation for paying back its debt with the current debt ceiling, over spending and lack of revenue.
Wednesday we get to listen to the Fed chairman himself (Ben Bernanke) to see what other insight he has into the future of the economy and the future Fed actions.
Thursday gives us a full docket. We have jobless claims numbers to see if more people are filing unemployment. Retail sales numbers to see if the consumer is still spending in this jobless recovery. The producer price index to see if costs are still rising. That along with inventory numbers will round out the day. If the inventory numbers are rising, and the retail sales are falling, we could see some pullback in the markets showing we are headed for the dreaded double dip in the economy.
Friday’s big reports are the consumer confidence report and the consumer price index. Let’s see how the country “feels” about their future prospects.