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Despite 9.2 percent unemployment, Buffet remains optimistic


Despite 9.2 percent unemployment, Buffet remains optimistic

Adam Russett July 8, 2011

Today, unemployment statistics took a turn for the worse as the 9.1 percent rate of May crept up to 9.2 percent in June, with a net gain of only 18,000 jobs in the past month, marking the slowest gain since September. 

"The message on the economy is ongoing stagnation," Pierre Ellis, senior economist at Decision economics in New York, told Reuters. "Income growth is marginal so there's no indication of momentum.

The scale of jobs gained and lost was uneven at best. The private sector appeared to gain a modest amount of jobs, adding 57,000 in June, while the government lost 39,000 positions due to fiscal problems at state and federal levels. Some speculate that the new austerity measures implemented by the White House – and espoused by House Republicans – have actually made unemployment rise, simply because trimming government organizations will result in job losses.

Construction was hit especially hard, as 9,000 jobs were lost in June after a decline of 4,000 in May.

Many speculate that the latest economic trends will be a tough hurdle for President Obama, whose Presidential campaign will hinge in large part on the success of his financial policies.

However, famed billionaire investor Warren Buffet, who is often seen as a trailblazer in the stock markets, told Bloomberg that he doesn't think that there is a chance of a double dip recession.

"I would bet very heavily against that," he said. "How fast the recovery will come, I don’t know. I see nothing that indicates any kind of a double dip." He added that he expects a housing recovery to begin in a year and believes unemployment will drop to around 6 percent in just a few years.  

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