Just when things were starting to look up. Unemployment figures unexpectedly took a turn for the worse.
The United States added a total of just 39,000 jobs last month, down from a gain of 172,000 in October, the Department of Labor reported on Friday. With local governments shedding jobs, the additions in the private sector were too small to reduce the ranks of the unemployed or even to keep pace with people entering the work force. The unemployment rate, which is based on a separate survey of households, rose to 9.8 percent.
That and the impending stock market crash that will be inevitable if the Congress doesn’t extend the Bush Tax Cuts. Currently capital gains taxes are capped at 15%. If Congress doesn’t act the rate will regress to the Clintonesque 20% rate. Such an increase will most certainly encourage investors to cash out, and result in another market crash.
While it is unclear how bad the sell off could be, it could wipe out the year’s gains, they warn.
“Capital gains tax rate will increase from 15 to 20 percent if the tax cuts are not extended. The last time the capital gains tax rate increased–on Jan. 1, 1987 from 20 to 28 percent–investors realized their gains at the lower tax rate,” said Daniel Clifton at a Washington partner at Strategas Research Partners. “We would expect a similar effect this time around as investors see the tax rate going up and choose to realize their gains and incur the 15 percent tax.”
Its not all bad news though, Folks who have paid attention to Glenn Beck are doing pretty well.
Everybody loves unexpected surprises this time of year, don’t they? And why are you so very merry this Christmas season? Because when I said, “Hey, maybe Glenn Beck’s got a point with this gold thing” — in May, when gold was under $1,200 an ounce – you listened.
Gold prices jumped back above $1,400 an ounce Friday to settle at a fresh record-high as the U.S. dollar slid following a surprisingly weak report on the nation’s job market.
February gold futures rose $16.90, or 1.2%, to settle at a nominal all-time high of $1,406.20 an ounce.