Employment: Teeth of the Recession Continue to Grind

Daily Forex Fundamentals | Written by Wachovia Corporation | Dec 05 08 14:43 GMT |

Nonfarm employment fell 533,000 with declines in manufacturing, construction, retail & business services and finance. Meanwhile, the unemployment rate rose to 6.7 percent with the diffusion index down to just 40 percent. Aggregate hours declined for the eighth month in a row, signaling a drop of five percent in fourth quarter GDP. Employment Declines Signal Broad Consumer Weakness Job declines were widespread with losses in manufacturing, construction and retail, financial and business services. The only bright spots remaining are health care and education. Over the last year, the breadth of industries adding jobs has dropped sharply suggesting broad weakness in consumer spending and dismal consumer confidence. Unemployment Up, Output Down Rising unemployment rates have been driven by a loss of jobs and are consistent with weakness in consumer spending and the drop in consumer sentiment. Unemployment rates remain significantly different by education cohort. Hours worked have declined, and this drop is consistent with negative five percent growth in fourth quarter GDP. Wachovia Corporation http://www.wachovia.com Disclaimer: The information and opinions herein are for general information use only. Wachovia Corporation and its affiliates, including Wachovia Bank, N.A., do not guarantee their accuracy or completeness, nor does Wachovia Corporation or any of its affiliates, including Wachovia Bank, N.A., assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or any foreign exchange transaction, or as personalized investment advice. Securities and foreign exchange transactions are not FDIC-insured, are not bank-guaranteed, and may lose value.