Oops. Analyst expectations were wrong-again. Economists surveyed by Dow Jones projected an increase of 188,000 new private sector jobs in May. The actual number, released by the Labor Department June 4, showed an uptick of less than one-fourth that number: 41,000. In all, U.S. non-farm payroll grew by 431,000 jobs, but more than 90 percent of the positions were in government, including temporary workers hired to assist with the 2010 census.
May's unemployment rate stood at 9.7 percent, down slightly from April, while the number of "long-term unemployed" (27 weeks or more) stayed steady at 6.8 million people-roughly half the total of those without work.
Despite the sluggish jobs report, Fed chairman Ben Bernanke told a June 7 question-and-answer session sponsored by the Woodrow Wilson Center that the economy has "a good bit of momentum" to avoid a double-dip recession but warned that the unemployment rate isn't likely to improve soon: "A lot of people are going to be under financial stress."
Breaking bread with Buffet
Entrepreneurs and investors hoping to win a "power lunch" with investor extraordinaire Warren Buffet began placing their bids June 6 on eBay (minimum opening bid: $25,000). Each year, the "Oracle of Omaha" makes himself available to the highest bidder for a three-hour confab. Proceeds benefit San Francisco's Glide Foundation, a 45-year-old poverty-fighting organization.
In 2008, the manager of a Chinese investment fund manager paid $2.11 million to dine with Buffet, the most ever paid for a charity item on eBay.
Glide is an offshoot of Glide Memorial United Methodist Church. Since the 1960s, Glide has been one of the denomination's most liberal congregations. In 1967, Glide pastor (and foundation founder) Cecil Williams ordered the cross removed from his church's sanctuary, telling his congregation to "celebrate life and living." The 80-year-old Williams remains at Glide UMC, carrying the title "minister of liberation."
Ups & downs
Gold prices rose to new highs-near $1,250 an ounce-as investors continued to fret about European debt problems and overall economic uncertainty. As of June 8, gold-considered by many to be a financial refuge and a reliable hedge against inflation-was up 13 percent for the year.
Meanwhile, stock investors continue to argue (via stock prices) about whether the economic glass is half empty or half full. Volatility has gripped the U.S. market since a late-April peak, reflected in repeated days of triple-digit advances/declines in the Dow Jones Industrial Average. Bears appeared to be winning the argument: On June 7 the Dow thudded to its lowest close since early November.
Hoping to ease market jitters that have sent the euro to a four-year low against the dollar, eurozone finance ministers began setting up a huge bailout fund aimed at rescuing members of Europe's currency union that face a default. Money from the $1 trillion (€750 billion) pool, a joint project of the European Union and the International Monetary Fund, is intended to counter investor fears that Spain and Portugal (and perhaps others) may follow Greece in needing a bailout to meet debt payments.
Germany, which is putting up the largest chunk of money for the EU fund, has been pressing other eurozone nations to cut spending to reduce the likelihood of needing to tap into the fund. Finance ministers urged Spain and Portugal toward structural reforms that would cut outlays for pensions and welfare.
Joseph Slife is the assistant editor of SoundMindInvesting.com.