Total nonfarm payroll employment increased by 195,000 in June, and the unemployment rate was unchanged at 7.6 percent, the Department of Labor’s U.S. Bureau of Labor Statistics (BOL) reported yesterday. Job growth occurred in the areas of leisure and hospitality, professional and business services, retail trade, health care, and financial activities. The number of unemployed persons, at 11.8 million, and the unemployment rate, at 7.6 percent, were unchanged in June.
In response, the markets were positive, as the Dow Jones industrial average finished up 1%, rising 147.29 points to close at 15,135.84. The broader Standard & Poor’s 500 index rose 1%, up 16.48 points to end at 1,631.89. The so-called “Obama stock market rally” continues it spectacular climb, from the ashes of a crashing economy and a crashing stock market.
Gold futures also dropped by nearly $40 an ounce on Friday, prompting a loss for the week on the back of a bigger-than-expected climb in new U.S. jobs last month. The jobs data contributed to a rise in the dollar and U.S. equities, luring investors away from the precious metal. They also raised the potential that the Federal Reserve will soon ease back on its quantitative easing program, which has been beneficial to gold.
Gold for August delivery GCQ3 -2.36% lost $39.20, or 3.1%, to settle at $1,212.70 an ounce on the Comex division of the New York Mercantile Exchange.
The Federal Reserve has indicated that it may discontinue “quantitative easing three” or better known as “QE3” at some point in the future. It is nicknamed QE3 because it is the third round of fed intervention. The first round of QE came during the financial crisis in 2008 and 2009. The second round (QE2), preceded by three months of fevered speculation, came in November 2010. Then came “QE3.”
Many have argued that the stock market rally is a result of “QE3,” but in fact the federal reserve program of “quantitative easing” has impacted the gold market and gold prices.
In other bullish news concerning the “Obama stock market rally,” a speech Thursday by the Federal Reserve Bank of New York President William Dudley played down the notion that rate hikes are in the cards anytime soon. Also bolstering the bullish sentiment, the National Association of Realtors reported pending home sales jumped to a six-year high in May.
Consumer confidence is also at its highest level since January of 2008.
President Obama inherited a quickly dropping stock market in late 2008 and early 2009. President Obama also inherited an unemployment situation reminiscent of the “Great Depression of 1929,” in which the stock market crashed and millions of Americans lost their jobs. The economic upturn also continues to add to President Obama’s legacy as one of the great Presidents in American history as he took a quickly depressing economy and turned it into a path of growth.
The “Obama stock market rally” is an apt description.
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John is the author of an award-winning book, the 2010 Winner of the USA National Best Book award for African American studies, published by The Elevator Group, Mr. and Mrs. Grassroots. Also available an eBook on Amazon. John is also a member of the Society of Midland Authors and is a book reviewer of political books for the New York Journal of Books. John has volunteered for many political campaigns. John is an unpaid volunteer and social media advisor at Robin Kelly for Congress.