The Wall Street Journal and NBC released a joint poll that shows 54 percent of respondents disapprove of the way President Obama is handling the economy, with 62 percent believing that the country is on the wrong track. 48 percent of respondents believe that Obama’s policies are “somewhat” responsible for the condition of the economy, while 34 percent believe his policies are “mainly or “solely” responsible.
Obama's general approval has slipped under 50 percent again after getting a bounce from the killing of Osama bin Laden by U.S. forces.
The economic news got no better for Obama this week.
Jobless claims came in better than the revised estimates on Thursday, but still show an economy struggling to create jobs.
In addition, the Philly Manufacturing index reported a significant contraction in manufacturing activity.
As our contributor Mike Shedlock reported: “Unfilled orders, delivery times, and inventory are currently in contraction and expected to remain so. The average work week is projected to contract,” adding that he expected hiring and wages to be weak even six months from now.
The BLS reported weekly unemployment claims of 414k versus estimates of 420k.
"Jobless claims declined by 16,000 to 414,000 in the week ended June 11, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected 420,000 filings, according to the median forecast. The number of people on unemployment benefit rolls and those receiving extended payments decreased."
Some of that decrease on continuing unemployment could be due to people running out of unemployment benefits, however. The number of people who have run out of benefits is at about one million with total unemployment at about 14 million. Another 9 million are employed just part-time.
"The economy needs to generate at least 125,000 jobs per month just to keep up with population growth. At least twice that many are needed to bring down the unemployment rate. But economists forecast the nation will add only about 1.9 million jobs this year, according to an Associated Press Economy survey earlier this week. That's only about 150,000 per month and is lower than a previous estimate two months ago," says the AP in the Houston Chronicle.
“Claims for unemployment insurance appear to have stabilized after spiking in late April,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, told Bloomberg. “Unfortunately, the level remains elevated, suggesting that neither the labor market nor the economy gathered much momentum in early June.”
Housing starts for May rose to a five month high, but the homebuilders confidence level is the lowest it's been in nine months because of oversupply and a downtick in residential building.
"Economists polled by Reuters had forecast housing starts rising to a 540,000-unit rate. Compared to May last year, residential construction was down 3.4 percent. An oversupply of previously owned houses, especially foreclosed properties which sell well below their value, is dampening new home construction. A survey on Wednesday showed sentiment among home builders at its lowest in nine months in June."
The numbers will likely not have any effect on stopping the downward slide of the equity markets, which seemed determined to re-test March lows.
The markets are attempting to rally this week after six straight weeks of losses.
The markets reflect two main problems with the economy:
1) The credit markets haven't been lending money because of demand factors, not liquidity; because 2) the economy isn't creating jobs.
Until those factors change, expect more stagnation with only spotty job growth.
And more downward revisions in Obama's approval ratings.
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