Friday proved to be a day of “really nasty news for American consumers,” to quote Andrew Tilton, senior economist with Goldman Sachs, a global banking and securities firm. The national unemployment rate shot up to 5.5 percent, the biggest leap in 22 years, and crude oil prices soared $10.75 a barrel. That was about what a barrel of oil cost just 10 years ago.
It was one of the worst days of economic news in a year already full of bad news. The Dow Jones reacted by plunging almost 395 points, its sharpest decline since February 2007. Other major indicators dropped by a comparable 3 percent.
This surge in oil prices was helped along by concerns over an Israeli threat to attack Iran if it doesn’t halt nuclear development. An underlying factor is the continuing slump of the U.S. dollar. Europe’s central bank president started the two-day surge in oil prices Thursday when he suggested that an increase in interest rates may be ahead, a step that strengthened the euro, Europe’s currency, against the dollar. Oil is priced in dollars on world markets, so a weaker dollar prompts sellers to demand higher prices.
Meanwhile, the asterisk next to the unemployment data involves the entry of thousands of young people into the job market this summer. They aren’t having a great deal of success. But the opportunities available to jobseekers in almost every other demographic are diminishing, as well — at least for now.
Texas and the Brown County area are certainly not immune to national and international market forces, but this region has so far managed to navigate these rough waters better than many other parts of the nation. There are hardships being felt; there are adjustments being made. The optimistic stance holds that in any volatile situation, the bad news is often followed by some good news. We’re overdue for some of that.