The latest retrenchment figures in U.S. is only 247,000, much less than the 325,000 expected. As a result, U.S. stock market goes up on 7 Aug 2009 (Friday).

Many analysts seem to confuse 2 things, yes, I agree that the Worst of the Crisis is probably behind us, however, that does not mean that Recovery is here.

Consumption in U.S. constitutes 70% of U.S. economy. With more people getting retrenched, (though there is a trend of fewer people being retrenched over the last few months) but that does not equate to an increase in jobs and employment. And without an improvement in employment rate, U.S. economy cannot recover.

In reccent months, Global stock markets seem to have priced in a "V-shaped" economic recovery. If there is any information that might lead to a question that the recovery might be "W" shape instead, market sentiments can turn (change aversely) very quickly.

Above is just sharing my personal comments and not meant as investment advice.

 

Cheers!

Dennis Ng, http://www.MasterYourFinance.com - when you master your Finance, you master your Destiny!

WASHINGTON (Reuters) - U.S. employers cut 247,000 jobs in July, far less than expected and the least in any month since last August, according to data on Friday that provided the clearest evidence yet that the economy was turning around.

 

With fewer workers being laid off, the unemployment rate eased to 9.4 percent in July from 9.5 percent the prior month, Labor Department data showed, the first time the jobless rate had fallen since April 2008.

 

The government revised job losses for May and June to show 43,000 fewer jobs lost than previously reported.

 

Analysts had expected non-farm payrolls to drop 320,000 in July and the unemployment rate to rise to 9.6 percent. The forecast was made earlier this week before other jobs data prompted some economists to lower their estimates for job losses.

 

U.S. stock index futures jumped on the data, which was seen as more evidence the economy's healing process had started. U.S. government bond prices tumbled and the dollar rose against the Japanese yen.

 

"This is positive news. This is the best showing (since) prior to the financial meltdown and those are important benchmarks to achieve," said Richard Dekaser, president of Woodley Park Research in Washington.

 

Data ranging from home sales to manufacturing have pointed to an economy starting to dig itself out of the worst recession since the Great Depression of the 1930s.

 

The fall in the jobless rate will be good news for President Barack Obama, who has seen his standing in public opinion polls slip as Americans fret about the weak economy and high unemployment.

 

MOSTLY GOOD NEWS

 

While employers cut fewer jobs than forecast in July, unemployment remains stubbornly high, meaning households have less income to spend. This could set the economy for an anemic recovery, analysts say.

 

Moreover, in July the workforce fell by 422,000, far more than the 155,000 decline in June, suggesting jobless workers may have given up looking for new work.

 

Since the start of the recession in December 2007, the economy has shed 6.7 million jobs, the department said, adding that the number of long-term unemployed continues to rise.

 

Job losses in July were spread across all sectors, but the pace of firings slowed markedly from previous months.

 

Manufacturing employment fell by 52,000 -- the first time since September losses were less than 100,000 -- after shrinking by 131,000 in June. This was probably due to the reopening of General Motors and Chrysler assembly plants after bankruptcy closures.

 

"Because layoffs in auto manufacturing already had been so large, fewer workers than usual were laid off for seasonal shutdowns in July," Labor Commissioner Keith Hall said, adding that the seasonally adjusted gain did not indicate an improvement in the industry.