| Ok, the jobless rate shot up to 4.9 percent from July's 4.5 percent and the expected 4.6 percent rate. That's the highest level in more than four years, and a full percentage point above the low set last November. This shocked the markets today, but investors should take a closer look at this number and other economic data released over the past few days. Unemployment data for the month of August is a lagging indicator, while the NAPM number is a leading indicator. Consumer confidence could be affected by the headline number of 4.9% unemployment, and that is the main danger. The Fed's easing monetary policy, lower energy prices, and falling inventories should help the economy to recover in the fourth quarter, with a gradual turn in the third quarter. The timing could be off by a few months, but my view remains that the seeds of recovery is already underway. We are just seeing some capitulation here. |
