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Investors around the world were on tenterhooks this morning ahead of the publication of arguably the most important set of world economic figures — the latest US unemployment statistics.
Analysts expect July's report on non-farm payrolls to show that 325,000 US workers lost their jobs during the month, a vast improvement on the axing of 467,000 jobs in June. But that rise would still see the country's unemployment rate rising to 9.6%, its highest in 16 years.
Big firms, including airplane-builder Boeing and technology giant Verizon, are still announcing job cuts to slash costs, and most major companies are continuing to hold back from hiring.
The jobless rate is predicted to hit 10% by early next year as consumer spending remains low.
But any stabilisation in today's unemployment figures will be seized on by investors as a sign that the US's 20-month recession could be coming to an end.
It follows data published yesterday on the number of US citizens submitting new claims for jobless benefits in the week to 1 August which showed a sharp fall. The number of new claims fell by 38,000 to 550,000, and this was viewed as an important sign of green shoots in the economy.
President Obama said the figures could hail the beginning of the end of the recession.
He said: “We're losing jobs at half the rate we were at the beginning of this year. Our financial system is no longer on the verge of collapse. The market is up.”
Reader views (1)
The jobless rate will continue to rise in the US / UK as unemployment is a lagging indicator. This recession is bigger than others we have experienced. It is a once in a 60-70 year cycle predicted by a famous Russian economist, Nikolai Kondratiev who was later imprisoned & executed by Stalin for his predictions. He proposed a theory that Western capitalist economies have long term 60 year cycles of boom followed by depression. These business cycles are now called "Kondratiev waves".
- Frank, Copenhagen, Denmark, 07/08/2009 09:58
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