Monthly Archives: June 2016

BREXIT VOTE SHOCKS THE WORLD

What happened?

What seemed unthinkable to many as recently as two weeks ago has now happened: The UK citizens voted to leave the European Union after 43 years of membership. However, nothing will actually change for a while because the UK will still be a member of the EU for at least two more years. It is also very possible that they stay in the EU longer as part of the negotiations that will begin immediately.  This surprise result on the Brexit vote adds to uncertainty around the world.  Continue reading

United Kingdom Votes on ‘Brexit’ next week

Voters in the United Kingdom will decide on June 23rd whether or not Britain will remain part of the European Union.  This has created a lot of debate within the U.K. and has created a lot of uncertainty in the markets.  A few of the main arguments for “Brexit”, or leaving the EU, is that it will allow the U.K. to better control immigration, free the U.K. from the E.U. regulations and bureaucracy, allow the U.K. to set up its own trade deals, and will save money on yearly E.U. membership fees.  Boris Johnson, a current Member of Parliament (MP) and former mayor of London, is one of the more prominent supporters of the “Brexit”. Continue reading

The Federal Reserve steps back on raising Interest Rates

Janet Yellen was interviewed by Harvard University on May 27, 2016, to discuss the economy. In the interview, Yellen stated that unemployment rate is close to its goal, but that there hasn’t been much improvement in wage growth or in the number of part timers looking for full time work.  This interview was taken before the release of the May job’s numbers that showed new jobs only grew by 38,000 in the month, which further illustrated Fed Chair Yellen’s point that the labor market has more room for improvement and that we need to look beyond the headline unemployment number and start looking at all the employment data figures to more accurately assess the current state of the jobs market.  Continue reading

U.S. Adds 38,000 Jobs in May

The Jobs report today showed that employers added just 38,000 workers in May, which was dramatically lower than the 158,000 new jobs that economists were predicting.  Despite the low number of new jobs created in May, the official unemployment rate fell to its lowest point in nearly a decade, 4.7 percent down from 5 percent in April. But the decline in the unemployment rate continues to be misleading because a record number of Americans have been dropping out of the labor force.  The labor force participation rate declined for the second month in a row, down to 62.6 percent, and the number of people working part time continued to rise to record levels.  We also need to keep in mind that historically as the economy gets into the middle of an economic recovery after a recession, we experience a “trade-off” between somewhat slower job growth and rising wages, and that’s what we’re beginning to see in this economic recovery. Continue reading