On Friday, the U.S. Department of Labor said the unemployment rate remained at 9.1%, with zero job growth during July. At the same time, the labor force participation rate (people in the U.S .either working or looking for work - 16 years and older) was 64.0% - the lowest level since 1984, with no increases in hourly wages or number of hours worked. On Wednesday of this week, leading Republican presidential contenders will debate their views on the path forward. On Thursday night, President Obama will present his jobs plan to a joint session of the U.S. Congress.
MY TAKE: Until recently, many market pundits, investors, and politicians found comfort in strong corporate profits and a global market stimulated by Federal Reserve-driven monetary intervention. Now, the U.S., along with many other developed countries may be facing longer-term structural changes to income distribution and economic stability. With voter cynicism increasing, this week’s political rhetoric should be assessed within an “actions speech louder than
words” context. While political finger-pointing will remain at heightened non-constructive levels, research by Maplight.org suggests that most political outcomes are still determined by which side has the largest financial backing. A quote popularized by Watergate era informant Deep Throat may still be relevant: “Follow the money”.