Unemployment is expected to hit a 26-year high on Thursday. Will the sobering news move markets or is it baked in?
According to estimates, the latest report from the Labor Dept. will probably show employers shed 355,000 jobs, raising the unemployment rate to 9.6% -- a 26-year high. We haven’t seen unemployment that bad since 1983!
While very severe, those numbers may actually trigger a sigh of relief from the market.
As bad as they are - they would be sharply lower than the average of 691,000 jobs lost each month in the first quarter. In fact investors would likely take it to mean the 18-month-old recession is easing its grip.
"If it comes in close to the median forecast, or if job losses are even smaller, the report will likely be viewed as the latest sign the recession is winding down," says Mark Vitner, senior economist at Wachovia.
How should you play it?
"I don’t think the jobs number is going to bear on the equity markets," muses Mike Darda of MKM.