Events: I am the unemployment rate in 2011, prospects for economic recovery and stock market to judge (Photo
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3 December employment report released by the U.S. jobless rate rose again, has now reached 9.8%. Since the summer of 2009, America's national unemployment rate has been 16 consecutive months at 9.5% or more. So the unemployment rate remains high heat on a topic of many media, many people doubt the U.S. economy really has recovered, the recent stock market continued to rise it just a temporary phenomenon of hot money speculation, fears of second bottom of the pessimism seems to have rise.
Today I talk about the unemployment rate to have little impact on the stock market in the end, the U.S. economy really recovering, when can the problem of declining unemployment rate.
Determine the economic health of the employment situation is an important indicator of whether or not, it affected the stock market is indeed great, because if civilians can not find work, personal consumption will be reduced. 70% of the U.S. economy is supported by private consumption, and if people clenched purse, do not spend money, the economy is difficult to recover.
However, I would like to point: the unemployment rate remains high and has no negative effect on the stock market (say what? Nonsense? ... ... Before you do, listen to me speak slowly ... ....) Consider the following diagram of these two above this is the unemployment rate since 1950 curve goes below S & P 500 Index is. Contrast can be seen, when the unemployment rate relatively low levels began to rise when the stock market will start from the top down; and other economic formally entered a recession, the unemployment rate has risen sharply, the stock market also continued to decline substantially; When the unemployment rate rose to a high level and then reverse sharply down, the stock market has bottomed out is one step ahead.
This phenomenon is easily explained: The stock market is a barometer of the economy and forward-looking, once the unemployment rate rose to a high level, which is usually the worst economy, the next will only get better, so the stock market will be "early" rebound, does not care about the media and people on the unemployment rate pessimism.
Also, see the pink circle graph using the two places marked. After the recession in the two (shown in gray bars on behalf of a recession), the unemployment rate did not decline immediately, but continued to rise or remains high, but this did not affect the bull market that had been initiated.
When the unemployment rate to decline? Recovery of the U.S. economy really?
The following diagram shows the IRS collection of this personal services income tax rate, the figure representative of the gray bars twice in 2001 and 2008 recession. We can compare the second following the S & P 500 Index chart, it is clear that the law is: labor income growth after the recession ended, and then with the stock market / economic growth and all the way up until the stagnation and decline in income growth When the stock market / economy began to decline.
Outlook 2011, the employment situation and economic prospects, I think there will be the unemployment rate fell, and the conclusions of the economic recovery will gradually accepted by the public and the media (in fact, did not affect the established connection does not accept the fact that, after the mood will be accepted only better, more prosperous consumer, economic recovery into a virtuous circle.) Below is a chart posted on the website at McClellan, which pointed out that the unemployment rate curve and the agreement between the consumer price index, which concluded in the next year the unemployment rate will fall.
News media coverage every day matter-economic figures are very few forward-looking analysis. This is why I do not care about financial news, stock market prediction because it is really useless. But rather the news media can serve as a research platform for market sentiment, for example, regard the unemployment rate brought a lot of big media, said Hunter said, small investors will be affected and pessimistic. This is precisely the driving force of the stock market continue to rise, because the bull market is always in doubt sound more up higher.
In conclusion, I think the U.S. stock market since March 2009 began a bull market is still not come to an end, the first half of 2011 will be to increase the main market trend. Of course, in the long-term upward trend, the market will decline in the mid-band appears, short-term correction is not said. But, these short-term and medium-term trend will not last long callback. Until one day, the signal appears at the top of the long-term bull market come to an end, otherwise the long-term investors, any callbacks are bargain buying opportunity.
(Author: Raymond Wang) |
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