The Bureau of Labor Statistics reported today that unemployment had reached 8.5%. The Department of Labor has a helpful chart on their website that indicates that the "minimum wage" will go up to $7.25 on July 24th. That will be the third annual increase since the Democrats retook Congress in the 2006 midterm election. It represents an 11% increase from last year and a 40% increase over the $5.15 rate of early 2006.
Here's my prediction. Companies and businesses that purchase minimum wage labor will accelerate those purchases as much as possible prior to July 24th. This implies that they will avoid labor purchases after July 24th. In other words, I expect unemployment to remain steady or even drop slightly before August and to increase after August. Sadly, I think we'll see double digit unemployment late this year.
Note: The minimum wage has always been, is now, and forever will be $0, that is why I put "minimum wage" in scare quotes.
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