The NYT reports that the dow’s fall to 9,908.39 — its lowest level in three months — has delivered a “psychological setback as investors braced for more market volatility.”
The fall of the “closely watched barometer of the economy’s health” was attributed to fears over Europe’s debt crisis. And now that the holy number of 10K has been disrupted, shit is expected to fly.
“Investors and traders find solace in 10,000,” said Jeffrey A. Hirsch, editor of The Stock Trader’s Almanac. “While it may not be important technically, falling below that level indicates that the whole economic picture is not as rosy as everyone had thought.”
No, judging by the plethora of friends still unemployed, nothing about this metaphorical economic picture looks rosy at all. Especially when the dip is combined with the recent poor employment numbers.
On net, the economy lost 208,000 nonfarm payroll jobs last quarter, and the unemployment rate rose to 10 percent, from 9.7 percent. As long as the labor market remains weak, consumers — whose purchases make up the bulk of economic output each quarter — will be reluctant to spend money.
The numbers look especially dim when you factor in what the Economix blog describes as the “growing underclass.”
But one major obstacle to that goal — and one that has so far gone mostly unacknowledged — is that many of the jobs slashed during this recession are not coming back. […] In fact, the share of the unemployed who lost their jobs permanently is at its highest level since at least 1967, the first year for which the Labor Department has these numbers available.
The jobs cited as being lost forever include industries like glassmaking, clerical work, and of course, print media. Those that are let go are subjected to a cycle of joblessness. The only way they can find work again is if they start a new career, which may involve a costly education in a different field or a costlier geographic move, and even then, the permanently unemployed will fall to the bottom of desired applicants.
All of which is to say that many of the Americans who are already out of work are likely to stay in that miserable state for a long, long time. And the longer they stay unemployed, the harder it will be for them to transition back into the work force, further adding to America’s growing underclass.
The situation has gotten so bad that poor aspiring j-school kids are resorting to whoring themselves out on Facebook. Let the best LinkedIn ad win, I guess.