“What makes the gold story so interesting is that bullion has so many different correlations — with inflation, with the dollar, with interest rates, with political uncertainty,” according to David Rosenberg, chief economist at Gluskin Sheff & Associates in Toronto. “This year, for example, gold has shifted from being a commodity toward being a currency — the classic role as a monetary metal that is no government’s liability.”
–Bloomberg News
Daily Archives: September 23, 2010
JOBLESS CLAIMS RISE. A SIGN OF STRUCTURAL UNEMPLOYMENT?
Today’s update on new jobless claims for last week is a reminder that the labor market is still stuck in neutral. After a month of declines in new filings for unemployment benefits, the trend reversed last week. New claims jumped 12,000 for the week ending September 18, the government reported. That’s discouraging, but nothing’s really changed in terms of the broad trend this year. We’re still going nowhere fast in the labor market.
SHOULD WE WORRY ABOUT STRUCTURAL UNEMPLOYMENT?
Unemployment is still high—9.6% as of last month. But is it structurally high? In other words, is the rise of joblessness due to fundamental changes in the economy? Or is the fallout from the recession the main problem? The answer matters. If structural unemployment dominates, the case for additional stimulus—monetary or fiscal—is weakened. A new round of quantitative easing, for instance, would be of little if any value if the economy is suffering from structural unemployment.