June Job Loss Sinks US Stock Market

So a "lagging" indicator is spooking the market again. Job loss in June was larger than expected, at 467,000. The unemployment rate was 26-year high, at 9.5%.

467K jobs cut in June; jobless rate at 9.5 percent
(7/2/09 AP via Yahoo Finance)

"Employers cut a larger-than-expected 467,000 jobs in June and the unemployment rate climbed to a 26-year high of 9.5 percent. Workers also saw weekly wages fall, suggesting Americans will have little appetite to spend and the economy's road to recovery will be bumpy.

"The Labor Department report, released Thursday, showed that even as the recession flashes signs of easing, companies likely will want to keep a lid on costs and be wary of hiring until they feel certain the economy is on solid ground.

"June's payroll reductions were deeper than the 363,000 that economists expected and average weekly earnings dropped to the lowest level in nearly a year.

However, the "real" unemployment rate, as many call, which includes people who have stopped looking for job or settled for part-time jobs, is much higher: 16.5%.

"If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.5 percent in June, the highest on records dating to 1994."

PLEASE read the post below about "credit-driven" recession by Karl Denninger (or click here). We are looking at the WRONG parameter (unemployment number) to assess the depth and severity of the current "credit-driven" recession.

As of 9:35 AM PST, Dow Jones Industrial Average is down 177 (over -2%) to 8,326. S&P 500 is down 21 (-2.3%) to 901. Nasdaq is down 45 (-2.5%) to 1,799.

On my stock screen, greens are scarce. TLT (20-year+ Treasury bond ETF), POT (Potash, fertilizer company), UUP (long US dollar ETF), MA (Mastercard), AIG.

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