Friday, November 03, 2006

Unemployment: Could Lacker be Right?

To hike or not to hike? That is the question that the Fed must be asking themselves this morning. The latest BIS employment stats show a new low (4.4%) in the unemployment rate. This contrasts with the recent lows in production and the housing slowdown, so the Fed board must be gathering their soothsayers to reflect on the appropriate weight to give these seeming opposite messages. The stats gods seem to be having fun playing with us, don't they?

[Thanks to for the image.]

Interestingly enough, this new surprise wasn't enough to reverse the direction of gold this morning. We'll see how it all washes out next week and in the months to come.

What interesting times we live in.


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