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Interest Rate HikeLuke Hodgens / Powerhouse Profits -- On Friday morning, the Labor Department announced the June unemployment rate and new jobs figures. Unemployment stayed at 5.6% as expected and 112,000 Americans found a job. Congratulations to all of you who are newly employed!
Although the jobs figure came in under analysts' expectations, the creation of over 100,000 new jobs brings the 10 month total to about 1.5 million. The jobs created in June were almost enough to employ the entire city of Topeka Kansas!
Although the robust jobs creation may have slowed a bit, we're still on pace to add over 750,000 more jobs by years end. Not too shabby! The initial market reaction to the news was poor however. All three major stock indexes opened down and the dollar slid.
The Fed raised the benchmark interest rate by an expected 25 basis points this week changing the four year trend of cuts. The Fed funds rate now sits at a still very slim 1.25%. But was the timing right? On Thursday and Friday, employment data was released indicating a slight slow down of the red hot jobs market. The Fed likely expected the jobs market to continue at super sonic speeds for June and felt the time was right for a hike.
At first glance you may think the Fed could have waited until the August meeting to increase rates leaving the economy at full speed for an additional month. But, Greenspan made the correct call. Although the June jobs report was not at high as analysts expected, creation was still robust. While job creation has slowed a bit, inflation has not.
Balancing favorable market conditions with inflationary conditions is why old Greenspan gets paid the big bucks. Bravo Alan, bravo.
From Rat Hole to Rat Pack
Saddam Hussein appeared in court this week to face charges of mass murder and other crimes against humanity. Dressed more like Frank Sinatra than a brutal dictator, Hussein denied any wrong doing as he lovingly referred to Kuwaitis as dogs.
Hussein, responsible for the greatest number of murders since Joseph Stalin, pled ignorance on the count of using chemical weapons on the Kurds at Halabja. Hussein, in his megalomaniacal manner said he had only heard of the atrocity on the radio and any such actions were taken to fulfill his duty as president.
Hussein will soon leave his palace on the River Euphrates to join his two boys in their new palace on the River Styx.
Exit Stage Left
One of America's finest actors bid his final adieu this week. Marlon Brando died Thursday at 6:20 p.m. in a Los Angeles-area hospital after being taken there Wednesday night. Cause of death has not been released. Brando, famous for his roles in The Godfather, The Wild One, A Streetcar Named Desire and many others, was 80 years old. The curtain has now closed on his illustrious career.
At The Marketplace
Luke Hodgens is the editor of