Employment situation

Today’s August 2008 Employment Situation Report states the economy lost 84,000 jobs in August, 60,000 in July, and 100,000 in June. The 3-mo average is -81,333 and the 12-mo average is -23,583. The continuing stream of monthly job losses (eight consecutive months now) has caused the unemployment rate to rise to 6.1% in August. It was 4.9% in January 2008. The FOMC has little choice but to keep the fed funds rate accomodative given the employment situation. If any action is taken, the FOMC would be more inclined to lower rates, though that seems unlikely given the 3.3% second quarter GDP report. The FOMC meets next on Sept 16.

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