http://www.indiadaily.com/editorial/20850.asp
Nonfarm payrolls to dip around 400K, unemployment rate to edge up to 9.6% - bond market and stock market both may decline Marla Guthie Aug. 2, 2009
According to many analysts, the stock market and the bond market is counting time before declining in a concert.
On August 7, 2009, Friday, around 8.30 AM EST, the labor department will announce the unemployment rate and change in norfarm payroll for July. The market expects a decline in number jobs in the order of 400,000. The unemployment will rise to a historic 9.6%.
The bond market is concerned about the slowing down of the layoffs. The stock market is concerned about the increasing unemployment rate. The biggest issue is overlooked though in these reports. The underemployment rate is rising very rapidly to a historic 60%. That means only 30% of US population is employed with appropriate remuneration. That is a huge wage deflation. At the same time shortage of commodities constitute a massive inflation.
The bond market and stock market both may decline because of the lower projected standard of living in coming months and years. The bond market faces a huge budget deficit.