Friday, June 6, 2008

Not good economic news

Not good news.

Smithfield Foods Inc. reported a 94% plunge in fiscal-fourth-quarter profit and warned consumers to brace themselves for higher meat costs this summer.

Unemployment Rate Jumps to 5.5% As Economy Continues to Shed Jobs
The U.S. unemployment rate posted its sharpest one-month increase in 22 years last month, suggesting U.S. consumers already facing a housing slump and soaring gasoline prices now confront growing pressure from a weakening jobs market. The data, which included a fifth-straight drop in nonfarm employment, should take financial-market expectations of Federal Reserve rate increases as soon as this fall off the table.

Also damping sentiment was a return to surging oil prices, with crude futures soaring $6.23 to $134.02 a barrel, just off record levels in New York. The gains continued a rebound that began on Thursday, as futures surged $5.49 – the biggest single-day price increase in the history of the New York Mercantile Exchange crude contract – to settle at $127.79 a barrel. Bullish predictions by analysts helped to keep the rally going on Friday. Ole Slorer, a shipping analyst at Morgan Stanley called for a "short-term spike in oil prices" to $150 a barrel by July 4 this year.

Meanwhile, geopolitical concerns were prodded by reports from Israel Friday that the country could launch an attack on Iran's nuclear facilities. "If Iran continues its nuclear weapons program, we will attack it," Shaoul Mofaz, an Israeli deputy prime minister and also the country's transportation minister, told the Yediot Aharonot daily. But Mofaz, who hopes to replace troubled Ehud Olmert as prime minister, stressed such an operation could only be conducted with U.S. support.

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