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Chairman Ben S. Bernanke and his Federal Reserve colleagues are preparing to meet next week as two-year Treasury yields at a record low signal a U.S. economy on the knife’s edge between growth and contraction. Guiding their assessment of the outlook for the world’s largest economy will be forecasts contained in the so-called Teal Book, a confidential staff report with a blue-green cover. Policy makers’ confidence in those forecasts may be tempered as the course of the expansion has confounded their expectations.
Joblessness is down but only because people with no jobs retired.
The jobless rate declined as 193,000 people left the labor force and the number of unemployed dropped by 156,000. The share of the eligible population holding a job declined to 58.1 percent, the lowest since July 1983.
During times of rapid growth, the U.S. typically adds at least 200,000 jobs a month, and much larger increases would be required for months on end to yank the unemployment rate back down to pre-recession levels.
The rate of hiring in July wasn’t even enough to absorb the natural increase in the labor force, which requires about 125,000 new jobs a month.
A somewhat better than expected U.S. non-farms payroll report Friday was enough to turn stock futures positive.
But its effect is already beginning to fade somewhat as the overwhelming gloom over the global economy, Thursday’s market tumble, and Europe’s spreading debt crisis continues.
S&P futures ES1U briefly pointed as high as 1,220 before falling back
Likewise with the Dow YM1U, which pointed above 11,500 immediately after the report, only to fall back to, 11,427.
Hadriana, I too have heard if our unemployment runs out then you no longer counted for or against the employment figures