US unemployment data surprises market
The US stock market has been surprised at today's unemployment figures which show a rise to 10.2% in October which is the highest figure since April 1983. The figures, released by the US Labor Department, show a rise from the 9.8% in September and confirm that nearly 200,000 jobs were lost in the U.S. economy between September and October. So what next for the US economy?
While this is no doubt a short-term setback for those who believed the US economy was back on the growth path, we need to appreciate that unemployment will continue to rise even when an economy is improving. It is this lag between economic recovery and improvement in the employment figures which can and does cause misleading indicators along the way.
However, investors in both the US and UK stock market have been taken aback a little by the increase in unemployment and investors have cashed in their chips as we head for the weekend. Whether this will be a short-term blip or a potential peak in the short-term rally on the stock market remains to be seen but it does give a warning to investors that the road ahead may be rocky.
Despite claims that stock markets around the world have uncoupled themselves from the US, the reaction to today's figures would suggest otherwise.
Share this..
Related stories
Sterling stages a rally on the foreign currency markets
Sterling has today picked up sharply after weeks and weeks of pressure and selling by investors. This comes just ahead of the MPC meeting to decide their next move on UK base rates and until just a few hours ago had been expected to announce a sharp reduction in rates. However, there is now speculation that this move down may not be as severe as first thought which has caused the fillip in the exc...
Read MoreWealth gap 'will lead to blood on streets'
One of Britain's richest men has warned the growing divide between the rich and poor could see the Paris riots of 2005 replicated on the country's streets.The warning from Sir Ronald Cohen, regarded as the father of UK venture capitalism, comes a day after some of Britain's leading private equity bosses gave evidence to a Parliamentary committee defending their "shadowy" industry.But amid criticis...
Read MoreDo as I say not as I do at the FSA
The Financial Services Authority (FSA) has today hit the headlines with news of a 40% increase in staff bonuses which now stand at almost £20 million. This is at a time when there is a general consensus across UK that the regulators have failed the UK financial sector and change is needed. While those in charge of the UK regulators will suggest that extra work and extra stress has been taken on b...
Read MoreUK motor insurance premiums rise by 14%
The average motor insurance premium in the UK has increased by 14% over last year with young drivers apparently bearing the brunt of this new push by the car insurance industry to lock in profits for the future. This comes at a time when more and more people in the UK are struggling to cover their everyday living expenses and a 14% increase in motor insurance premiums is a disaster for many people...
Read MoreHere we go again, British jobs for British workers!
As we approach the next general election (a coincidence?) Alan Johnson, the Home Secretary, will today announce plans for "British jobs for British workers". This is a rehash of Gordon Brown's claim from two years ago which sensationally backfired and led to significant friction within the Labour Party and the UK employment market. So is this particular strategy plausible?
In realit...