up a modest 4.76 points over July numbers to 16.03 for August. Unemployment dipped slightly and the increase in the number of “discouraged” workers slowed, according to the U.S. Bureau of Labor Statistics - but as with prior economic recessions and depressions employment changes are once again trailing the other economic indicators:The small ERRI gain shows Wall Street's optimism hasn't yet reached most other streets; it will take some time for average Americans to feel - or believe - that this long subtle assault that started with obscure financial "devices" has eased and real recovery has begun. The problem, we know now, was not sub-prime lending, which can and does help people, but aggressive and deliberately predatory sub-prime lending from companies and CEOs who thought they were immune to the risks in an essentially unregulated environment.
The ERRI uses a hypothetical, indexed fund (similar in some ways to a mutual fund) to measure investor confidence across nearly a dozen sectors of the economy, but until jobs and wages show sustained improvements you won't see it move back closer to (or above) the 100 mark no matter how fast stock prices drive the stock/investment component higher.
"Equity investments are volatile, particularly when not carefully diversified and monitored; the ERRI would have shown even less improvement had closing prices from even a day sooner been utilized in the calculations (since that would have reduced the 'ERRI fund' improvement.)"
The modest gain in the August ERRI figures reflect both equity prices as of the close of the NYSE on Friday, August 7th and data released in the monthly update/estimate from the Department of Labor earlier the same day combined using a new calculation. Without the on-going hiring in health care and the slight turn-around in unemployment rate even the robust gains in various stock markets would not have had much impact on the index.
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