Companies are pulling in big profits but that isn't translating into decreased unemployment. Where is the 'trickle down?' I'm starting to lose my faith in voodoo economics.
The economy has done better for the past 50 years under Democratic presidents -- and that isn't any voodoo.
http://www.slate.com/id/2199810NEW YORK -
Investors have been buying stocks for nearly 14 months on the assumption that a rebounding economy will bring higher earnings and lower unemployment. Companies' first-quarter profit reports have been upbeat, and the government released promising numbers showing employers added 162,000 jobs in March. So, many investors may now be looking for stronger job growth.
The hiring will come, but only gradually, analysts say. The concern in the market is that investors may be so impressed by earnings they'll get overconfident about employment. And that could mean disappointment if the Labor Department's April jobs report two weeks from now falls short of expectations. Major stock indexes are already bouncing along 18-month highs and overdue for a retreat, most analysts say.
Unemployment sits at 9.7 percent, compared with 10.1 percent in October. Investors believe a sustained increase in job growth will be the ultimate proof that the economy is healing.
Analysts polled by Thomson Reuters now forecast that the companies that make up the S&P 500 will earn about $83 per share in 2010. At the start of the year, analysts were calling for earnings to rise to about $77.50 in 2010 from about $62 in 2009.
Strong earnings aren’t translating into jobs yet
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