Sponsored Link:

Oil Prices Plummet Nearly 4% on Bigger-Than-Expected U.S. Job Cuts

[Editor's Note: For additional insight on the global outlook for oil prices, check out the next installment of Money Morning's Mid-Year Forecast, which will appear on Monday.]

From Money Morning Staff Reports

Crude oil futures plummeted nearly 4% today (Thursday) – reaching their lowest point in a month – after a disappointing jobs report ignited investor fears that the U.S. economy’s rebound may be further off than most thought.

A strengthening of the U.S. dollar against most other major currencies also weighed heavily on crude-oil prices.

The U.S. Labor Department said today employers slashed their payrolls by a larger-than-expected 467,000 in June – about 44% more than the drop of 325,000 that had been expected, according to a survey of economists conducted by MarketWatch.com. That followed a work-force reduction of 322,000 in May.

August crude futures dropped $2.58, or 3.7%, to settle at $66.73 a barrel on the New York Mercantile Exchange (Nasdaq: CME) on Thursday, the lowest closing level for a front-month contract since June 3, MarketWatch reported.

Sign up below…
and we’ll send you a new investment report for free:

“Credit Crisis Report.”

"The disappointing jobs numbers raise concern about the strength and timing of a recovery," James Williams, an economist at energy-research firm WTRG Economics, told the news service.

Today’s Labor Department report also showed the unemployment rate surged to 9.5% in June, the highest level since August 1983. Although that was less than the 9.6% that economists projected, “the report [still] was terrible," Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., told CNNMoney.com. “It’s telling us that there is a lot more pain than people realize that we are going to have to get through before there can be a recovery."

Money Morning has been warning investors for weeks that the United States was headed for a “jobless recovery,” and has launched two new news series – a jobless recovery career strategy series, and a mid-year forecast series – that each are aimed at helping readers better cope with the looming uncertainty.

Stocks were hit hard today because of the jobs report. Dow losing 212 points, after a worse-than-expected jobs report hammered hopes that the economy is close to stabilizing.

The Dow Jones industrial Average (INDU) fell 223.32 points, or 2.63%, to close at 8280.74. The Standard & Poor’s 500 Index fell 2.91%, while the tech-laden Nasdaq Composite Index fell 2.67%.

News and Related Story Links:

July 2nd, 2009

Why Gold Will Surpass $2,500

Few investors realize that inflation is the least of the factors driving the bull market in gold. Other factors, like Venezuela's crackdown on gold exports, are likely to push prices higher. Find out how to play each of the "7 Key Drivers" in our Money Morning Publisher's Series report... Go here to get it for free.




This entry was posted on Thursday, July 2nd, 2009 at 11:17 pm and is filed under Top News. You can follow any responses to this entry through the RSS 2.0 feed. Due to the amount of comments we receive Money Morning will not be able to respond to all questions. If you have not already registered to leave a comment, once doing so you will receive Money Morning's Daily Email.

There Is 1 Response So Far. »

  1. Pingback by Another Dismal Earnings Season for U.S. Companies? on 6 July 2009:

    [...] (see below) sent equities into a tailspin and left the indexes down big for the week.  Oil fell below the $67 a barrel level as traders perceived the expected post-recession increase in demand will not occur overnight. While [...]

Post a Response