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Recovery in sight

August 7, 2009
 REUTERS/Kai Pfaffenbach (GERMANY)

REUTERS/Kai Pfaffenbach (GERMANY)

U.S. job losses slowed and unemployment took a surprising fall last month, sending hope that the recession may be coming to an end. Nonfarm payrolls declined 247,000 in July, which is the smallest decline since last August. Unemployment slid 0.1 percentage point to 9.4%. When marginally attached and involuntary part-time employees are added, unemployment sits at 16.3% which is a decline from June.

Upon receiving news of the better-than-expected figures, European equities markets rallied to recover from being in the red. UBS rose 0.6 percent and France’s Société Général rose 2.8 percent.

Even on the heels of positive figures, a double-digit unemployment rate is still very probable by year-end. The economy needs not only to stop losing jobs, but also needs to expand at a rate of 2.5 percent just to keep up with new entrants to the labor force.

-Daniel Smart

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