We are 5-6 years into our jobless recovery. And even this tepid recovery shows signs of stalling.Today's GDP numbers ARE a positive sign, but unfortunately are just not very relevant to the typical American these days.
The combination of Outsourcing, Automation, and Illegal Immigration have decimated the working class and working poor, with no end in sight. Wages can't rise with these headwinds... and if they did then the Fed would immediately raise interest rates to ward off the "wage price spiral" crushing wages again. They think it's ok for Stocks to jump out of control... but wage raises for the plebes is unacceptable. For example - One was laid off in 2010 shortly after the start of the recession. He highly skilled in my field, yet have been bouncing around from job to job all making starting salary numbers, despite being 40 years old. Paying my mortgage is a struggle. Paying his health insurance is worse ($375/month from Freelancer’s Union). He is forced to buy cheap bare minimum car insurance ($18/month from Insurance Panda). His daughter is forced to attend a public school that is in increasingly worse condition thanks to illegal children and welfare leeches moving in. Yet here I am, unable to afford a quality education for her....
Federal Reserve monetary policy moves (although necessary) have mainly benefitted Big Business (especially Finance) and speculators, to the detriment of savers. Zero Interest Rate policy and Fed Purchases in the Open Market simply don't help the Average American much. Thus we see a booming Stock Market (which is clearly an echo bubble based on Fed policy and not on macroeconomic data) and we saw a mini echo RE bubble (especially the "luxury rental" segment)
People ask why the Stock Market isn't jumping with today's news. The answer is obvious. It likes the increase in GDP, but it doesn't like the idea that the Fed may need to stop goosing the market. The Fed is trapped with no exit strategy.
There is no Fiscal Policy these days due to Republican intransigence.
We need a drop in REAL unemployment and increased WAGES, and should focus on those.
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The pan-European FTSEurofirst 300 index .FTEU3 of leading shares gained 0.3 percent, a small recovery from its nearly 4 percent fall over the past two weeks on concerns over financial uncertainty about Portugal's Banco Espirito Santo (BES.LS),
Vladimir Putin has attempted to sidestep Western sanctions on Russia’s energy sector by signing a $20bn trade deal that could see his country become the largest importer of oil from Iran.
The five-year accord will see Russia help Iran organise oil sales as well as “cooperate in the oil-gas industry, construction of power plants, grids, supply of machinery, consumer goods and agriculture products”, according to a statement by the Energy Ministry in Moscow.
News of the agreement hit US markets. The Dow fell 188 points, or 1.1pc, in late trading, led by energy companies such as Chevron (-2.4pc) and ExxonMobil (-2.1pc). Brent Crude fell 1.5pc before recovering to trade down 0.8pc at $104.54.
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