FRIDAY SEPTEMBER 4, 2009

Ugly Headline...Better Trend

This morning’s unemployment report showed that the unemployment rate in the U.S. jumped from 9.4% to 9.7%. This is a headline that will cover the headlines and airwaves.  Certainly, the higher rate is disappointing and will likely fuel the correction psychology further. The markets will gyrate on this number today.


However, if you look at the bigger and longer term picture, there is some good news in this number. In the first quarter of 2009, the economy shed jobs at a rate of 690,000 per month. In the second quarter, the rate was 450,000 per month. Today's number suggests the third quarter rate has slowed to 215,000. The trend is improving and points to better employment figures in the next few quarters. It is unreasonable to expect the job market to go from minus 690,000 to positive in just one or two quarters. If this trend plays out, employment, along with housing, will cease to be a negative drag on the economy.

 

On this opening weekend for college football, I know this sounds like football fans that declare victory when their team lost by "only" by one touchdown (something we heard a lot around hear lately!). Nonetheless, the long-term emplyment trend is consistent with other economic recoveries.  Patience is required.

POSTED AT 1899-12-30 08:58:00.0

KEN ENTENMANN, CFA
SENIOR VICE PRESIDENT AND
THE DIRECTOR OF INVESTMENT MANAGEMENT SERVICES

Ken is a Senior Vice President and the Director of the Trust and Investment Services at Alliance Bank, N.A. He has 23 years of investment experience and oversees the management of assets totaling $1 billion. He holds a B.S. in Applied Economics and Business Management from Cornell University and an M.B.A. from the William E. Simon Graduate School of Business Administration at the University of Rochester. He has also earned his Chartered Financial Analyst designation. He is a member of the Executive Committee of the Trust Division of the New York Banker's Association. He is also a director of the Central New York Community Foundation.

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The opinions expressed here do not represent the views of Alliance Financial Corporation and Alliance Bank, N.A. This communication is not an offer or solicitation for the purchase or sale of any security, is for general informational purposes only and does not provide personalized investment advice. When making personal investment decisions you should consult your investment adviser or rely on your own research. Copyright 2008.