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Opec As A Cartel Essay

1577 words - 6 pages

COMMENTARY COVERSHEETEconomics commentary number: SL Number 4Title of extract: The Incredible Shrinking U.S. Job MarketSource of extract: ForbesDate of extract: 08/02/2009Word count: 730 wordsDate the commentary was written: 24/02/2009Sections of the syllabus to which the commentary relates: Section 3Candidate name:Candidate number:EXTRACTThe Incredible Shrinking U.S. Job MarketCarl Gutierrez and Maurna Desmond, 02.08.09, 12:00 AM ESTEmployment situation likely to go from bad to worse in the short run.U.S. joblessness is at its worst level in decades, and further deterioration is in the cards.The Labor Department reported Friday that 598,000 private sector jobs were lost in January, pushing the unemployment rate to 7.6%, up from 7.2% in December. (See "U.S. Jobs Hemorrhage In '08.") Economists had expected only 540,000 jobs would be eliminated, with an unemployment rate to 7.5%.The amount of Americans out of work will probably grow. The labor market lags behind economic output, and with the U.S. economy widely expected to contract in the first half of the year, the unemployment rate could reach 9.0%. Even with the best-case scenario of an economic turnaround in the second half of 2009, the labor market wouldn't see an improvement at least until the end of the year."It's going to get worse before it gets worse," said Doug Roberts, chief investment strategist for Channel Capital Research.com.The massive jobless figure actually led to significant market gains Friday, as investors bet the shock would move Congress into passing President Barack Obama's economic stimulus package.Mark King, chief investment officer for Bell Investment Advisors, said it would take a double-digit employment rate to provoke a decline in stocks, indicating that Wall Street has already built a lot of pessimism into stock prices.U.S. Treasury bonds, on the other hand, fell sharply, as bond investors expected the data to lead to massive government debt issuance, an inevitable consequence of federal bailout and stimulus plans that investors seem to have overlooked until the past few weeks. The bellwether 10-year Treasury note's decline raised its yield to 2.99% from 2.90% on Thursday and up from 2.08% late last year.December job losses were revised to 577,000, from 524,000. More than 11.6 million Americans are now unemployed, and since December 2007, 3.6 million jobs have been lost, about half in the final three months of 2008.The speed and scale of the January layoffs were staggering. In the past week alone, Macy's laid off 7,000, Eastman Kodak announced 4,500 job cuts and Starbucks let go of 6,700 workers, to name only a few as payroll cuts were made throughout sectors and industries. The only exceptions in the January data were education, health and government jobs."Businesses are rushing to cut as rapidly as possible and the more they cut now, the less we will see being cut three or four months down the road. They are shortening the adjustment period," said Joel Naroff, an...

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