That sound you hear is Republicans sobbing. Yes, the stock market is hitting new highs under a Democratic President, which makes no sense since Republicans are supposed to be the “business” party.
“It’s been a stellar year for equities already, and on the first day of a new month, the S&P 500 hit a new milestone: 1700,” reads a giddy report from the Wall Street Journal’s Moneybeat Thursday morning. Crediting the rally to a reassuring Chinese PMI report and a the slide in U.S. jobless claims, they continue, “The S&P 500 is now up 19% on the year, as is the Dow. The Nasdaq Comp’s up 21% and the Russell 2000 is up 25%.”
Yes, you read that correctly, the Dow and the S&P are up 19% this year.
Today’s rally is being partially attributed to the fact that jobless claims declined to their lowest level in five years. Bloomberg reported Thursday, “Applications (INJCJC) for unemployment insurance payments declined by 19,000 to 326,000 in the week ended July 27, the fewest since January 2008, from a revised 345,000 the prior week, the Labor Department reported today in Washington.”
It’s not just that unemployment numbers are dropping, but payrolls are rising. Payrolls rose by 195,000 workers in June and Bloomberg analysts write, “A Labor Department report tomorrow may show employment rose by another 185,000 last month, according to the median estimate of economists surveyed by Bloomberg.”
“It’s a stronger labor market than anybody thought we’d be seeing this time of year,” Guy Berger, an economist at RBS Securities Inc. in Stamford, Connecticut told Bloomberg. “We’re talking about continued decent payroll growth.”
Bad Barack. Stop making the Republicans cry.
In July, two more economic records were set. “The first record shattered was the U.S. government posted a ‘huge’ budget surplus for June, in fact the largest for that month on record at $117 billion. The second record was the Dow, which rallied above its all-time closing high this morning after Bernake assured investors that the central bank would be keeping stimulus measures in place.”
This is good news for the titans of industry and those invested in the stock market, as well as our general economic outlook. It’s excellent news for President Obama’s economic legacy and it reinforces the notion set into place under Clinton that a Democratic president is better for the economy. Go figure.
However, the fact remains that our lawmakers have done nothing for the average American on the issue of jobs. President Obama has been trying to get the House to act on jobs for years to no avail.
A stock market rally that hits new highs is great news, and since it’s been consistent, it belies the Republican claim to being the party of “business”. But a real recovery will be felt in the pocketbooks of working class Americans.
It’s time the GOP-led House stopped trying to obstruct the recovery and instead, passed a real jobs bill.
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