The pace of U.S. job losses slowed more than forecast last month and the unemployment rate dropped for the first time in more than a year, the clearest signs yet the worst slump since the Great Depression may be ending.
Payrolls fell by 247,000, after a 443,000 loss in June, the Labor Department said today in Washington. The jobless rate unexpectedly dropped to 9.4 percent from 9.5 percent.
I'm going to be a Negative Nellie here and rain on Wall Street's parade. The improvement in job losses says nothing about the durability or quality of jobs that exist. Consider that the government's "Cash for Clunkers" subsidy probably saved the jobs of auto salesmen who would otherwise have been let go. When this artificially stimulated demand can no longer be pulled forward, the job numbers around Christmas are likely to be a disaster.
Furthermore, real wages for most Americans have remained stagnant for over 30 years. Reducing the rate at which low-income jobs are destroyed does not help the economy grow when those workers are more focused than ever on saving money. The article mentioned that year-on-year wage growth is 2.5%, but inflation is much higher than that (check out Shadowstats) due to the Fed's quant easing! Real earnings won't grow until the consumer comes back. I've said that before and I'll say it again because I know Wall Street won't listen.
I'm still short.