More On the Economy...

The newspapers and politicians had a lot to say over the weekend about the disappointing hiring report for May. Only 69,000 jobs were created in May causing the unemployment rate to increase to 8.2% from 8.1%. The unemployment rate also went up because 642,000 Americans resumed their job search. The unemployment data confirms a downshift in hiring that began in May. A net of just 69,000 jobs added in May falls well short of what is required to support a self-sustaining recovery. Both the March and April job reports were weak.

Economists believe that the increased gasoline prices, concern about Europe, economic slowing in Asia, and uncertainty about the tax rules that will apply after January 1 (called a "Fiscal Cliff" by Comerica‟s economist) are dramatically slowing the U.S. Economy. The Fiscal Cliff is having a significant impact on business confidence because if tax laws are not changed income taxes paid by small and medium sized business will increase significantly next year.

This all comes as auto sales and housing were showing some improvement.

The stock market fell as people left equities and purchased bonds. U. S. Treasury bond yields were driven to historic lows. Lower bond prices should lead to lower mortgage rates which could help bolster home buying activity. In other good news, world crude oil prices fell to $83.73 per barrel.