Sunday, July 8, 2007

Unemployment Rate Remains at 4.5%, But is Economy as Strong as Many Think?

The unemployment rate remained at 4.5% with non-farm job creation of about 132,000, from the BLS. YOY growth in real hourly wages for production workers remained at 1.61% for May, basically unchanged for the last 3 months. Not sure why this caused all the positive news from the WSJ and others. I see it as largely immaterial: 1) unemployment is a lagging indicator and 2) the growth in real hourly wages and the unemployment rate has been static for the last 3 months.

In addition another indicator for the economy, retail sales, is expected to be weak for June (Market Watch). The retail sales numbers are released this Friday.

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