Unemployment Continues to Rise

U.S. dollar in currency trading and payroll data

Unemployment continues to rise. The most recent job loss numbers are right in line with expectations, however. Non-farm payrolls showed a loss of 663,000 jobs, and the unemployment rate has risen to 8.5% — the highest it’s been in 26 years.

Part of the problem is that measures aimed to increase employment, which were passed in the recent economic stimulus bill, have not been put into effect. Another issue is that companies continue to try and bolster the bottom line by cutting costs. More alarmingly, though, is the assessment by a Maryland profession in Financial Times:

“The economy is shifting to permanently lower levels of production and employment, as the recession nears [a] turn into a depression,” said Peter Morici, professor at the University of Maryland’s business school. “Fundamental structural problems—poorly managed banks, wasteful uses for imported oil and the lopsided rules for competition with China and other Asia mercantilists—have come home to roost and threaten to topple American prosperity.”

The fundamentals of the U.S. economy may be in trouble, and that could mean long-term problems for the U.S. dollar in currency trading. Indeed, problems may already be on the way for the greenback in forex trading. Today’s payroll news didn’t prompt the same levels of safe haven buying that other weak economic data have.