December ,2007
The signs of a slump in the American economy are beginning to appear with yesterday's announcement of the unemployment rate. The rate has jumped from 4.7% to 5% .This is a substantial rise in unemployment and confirms that recessionary forces are gathering strength. It should also guarantee that the Federal Reserve cuts its trend setting interest rate later this month. Most of the job losses occured in manufacturing where slowing domestic demand because of the sub prime morgage market crisis has taken its toll despite the rising attractiveness of American exports because of the falling value of the US dollar. The construction sector was also hard hit.Total unemployment is now up to 7.7 million persons up from 6.8 million a year ago when the rate of unemployment was 4.4 %. Unemployment among black person has now reached 9 % up from 8.0 % last month, among Hispanics it has gone up to 6.3 %.from 5.7 %.
(All data courtesy of the US bureau of labour statistics)
The stock market reacted by a significant sell-off.
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