Friday’s unemployment numbers once again showed that companies were slow to hire with private employers only adding a net total of 71,000 jobs in the month of July. That’s not even close to lowering the unemployment rate yet after the jobs report was released on Friday morning and the markets subsequently tumbled, the Dow, Nasdaq and S&P came way off their lows of the day to close modestly lower. Nothing seems to be able to keep these markets down and over the past few months when the markets do correct, they are met with tremendous support. However, there is no question in my mind that at some point meaningful job growth is going to have to occur in order to sustain not only the market support that currently exists, but any future real upside that we all want to see.
U.S. companies have $1.8 trillion on their balance sheets, so what is needed for them to begin to feel confident about expanding their businesses and payrolls? Well that’s a loaded question. I have to believe that until Corporate America can understand the regualtory and tax situations out of Washington, they will not have confidence in this current economy. Somebody is going to have to reach these business leaders and provide to them compelling reasons on why they should begin to invest in expansion and jobs. That’s not going to happen until there are concrete policies out of Washington and what a coup it would be if the Bush tax cuts were extended. I can’t wait to see how the upcoming mid-term elections pan out, for that my friends could provide the necessary means to get this country moving again.
Have a great week.