533,000 Americans lost their jobs in November - what better reason for a 260 point rally?
Chalk it up to 'streamlining' or employee attrition, but you'd think that Wall Street was actually pleased to see another half a million Americans hitting the unemployment lines. If 'irrational exuberance' was $300 million IPOs for companies that consisted of little more than a .com suffix, office space and three chairs, then we clearly must develop a new dictum to describe Wall Street's apparent contentment with the entire population of Wyoming suddenly being out of work. I cannot think of one possible explanation for such an irrational bounce, but then again, little about this market makes sense these days.
It could be argued that much of the bad news regarding unemployment has already been discounted in the market's movements, but somehow I don't think it's been baked into the cake entirely. People seem to forget: the unemployed are not big spenders. Some estimates put the unofficial unemployment rate at closer to 13%. As is the case with the government's highly questionable methodology for calculating real inflation, Washington utilizes equally dubious methods to calculate their optimistic employment figures. This from the WSJ:
An alternative gauge of unemployment -- which includes discouraged workers and those whose hours have been cut back to part-time -- rose to 12.5% from 11.8%. The number of workers forced to work part-time rose by 621,000 to 7.3 million.
