Well, it is pretty clear that we are now in the thick of a recession. The November 7 U.S. employment report for October showed a rise in the unemployment rate from 6.1% to 6.5% and a 240,000 decline in payroll employment in October. Also, there was a big downward revision of the September figure to a 284,000 decline. Previous to September, the employment declines over the prior eight months had been moderate, averaging about 84,000 a month. So I would date the recession as beginning in September, and cite as the driving forces the delayed impact of the huge oil price spike over the first half of the year, which increased our imported oil bill by about $400 billion compared to 2000, and the global collapse in credit markets that hit after Lehman and AIG failed in mid-September.
Even throughout major challenging events, markets are resilient. Please click on the link below to view major happenings throughout United States history and how the markets have reacted:
For the past month, we have been writing about the impact of the acute phase of the global credit crisis-that we think began when Lehman Brothers filed for banktruptcy on September 15-on the U.S. economy, and we finally began to see some evidence of the impact in the economic data released last week. On balance, the data for September and for Q3 2008 as a whole was mixed, while the data released last week for October was abysmal. The September data revealed that:
Polls in battleground states show that the presidential election is shaping up to result in a much wider electoral margin than in recent elections, with Democrat Barack Obama in the lead headed into the election. While anything can happen, with the likely outcome of a Democrat in the White House and a wider majority for the Democrats in the House, we are most closely watching the prospects for a 60-vote, filibuster proof majority in the Senate for the Democrats. While the President has a lot of impact on foreign policy and trade, the Senate sets the pace on taxes, laws affecting business, and other issues of interest to investors.
To see the rest of this article on the Election of 2008, please click on the link below: