So was the big loss in the stock market the other day due to Obama winning the election? I don’t think so. Yesterday also saw the release of the employment/unemployment numbers from the Bureau of Labor Statistics. While the unemployment rate held at 6.1%, the nonfarm payroll fell by 159,000 jobs, an it is likely that the reason why the unemployment rate held at 6.1% is because of the number of people who left the labor force. This is not good news to an already jittery market. And prior to this we had bad news in terms from manufacturers and autos the day before the election.
Update: Actually the employment numbers above were from September. In listening to the radio this morning they referenced employment numbers as being one reason for yesterdays slike in stock prices. When I went to the BLS website I failed to check the date. However, yesterday did see the release of the Institute of Supply Managment’s service index which is down pretty much across the board. New business activity? Down. New orders? Down. Employment? Down. The only areas where things were increasing or unchanged were in prices, new export orders and imports.
As for todays drop the big news seems to be that the weekly unemployment insurance claims are up to 3.8 million on a seasonally adjusted basis which represents a 25 year high, and is up about 1.3 million from a year ago. Also, the BLS preliminary reports show that productivity growth has slowed as well.
As Dave Schuler notes, Barack Obam is going to find himself in a position very much like the one George Bush found himself in: coming into office with a slowing/contracting economy. Now might be a good idea of rethinking that tax increase, at least for awhile.
