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George Chamberlin's Money in the Morning

It seems investors are cautiously looking over the cliff and deciding to get on with things. It hasn't been anything big, but the Dow Industrials have been up in five of the past seven sessions. If they were concerned about the economy and the markets falling after Congress and the Obama administration fail to take care of business before the end of the year, there would be more selling than buying. With only 16 trading sessions left in 2012 it seems unlikely the matter will be resolved before the ball drops in Times Square.


The markets got an early boost this morning from the latest jobs report from the Department of Labor. The unemployment rate in November fell to 7.7 percent, the lowest rate since December 2008. Payrolls did increase during the month by 146,000, well above the "experts" expectations. Most of the increase in hiring was in the retail sector, where companies were bringing on extra workers for the holidays. The main reason for the drop in the unemployment rate was a decline in the number of people looking for work. You can link that directly to the impact of Superstorm Sandy, which took hundreds of thousands of people out of the work force on a temporary basis. All in all, a good report, not great.

By the way, the Labor Department report also showed a sharp downward revision in the report for October, which was released just a few days before the Nov. 6 presidential election. Originally the report said payrolls rose by 171,000, one of the biggest increases in the past couple of years. However, the number was revised today to just 138,000.

Probably my favorite economic report is a quarterly update from the Federal Reserve on what is called the "flow of funds." It measures the net U.S. household wealth, in other words, assets minus liabilities. At the end of the third quarter 2012, the number stood at $64.77 trillion, up $1.72 trillion from the previous quarter. The credit goes to rising stocks and home values as well as a concerted effort by households to pay down their debt. It is very reasonable the growth in wealth will continue in coming quarters and surpass the old record of $67.3 trillion in the third quarter of 2007.

Many people would be surprised by the rise in household wealth. That's because they believe the constant barrage of misinformation about how bad things are out there. Keep all of this in mind during the holidays. Sure, there are many who struggle, but most households have worked very hard in recent years to improve their own financial situation.

It is not the best football game of the year, but it is one I rarely miss watching. Tomorrow will mark the 113th year in a row that Army and Navy has squared off in what is referred to as "America's Game." The pageantry of the Midshipmen and Cadets marching into the stadium in Philadelphia, the traditions during the game, and then the emotional closing ceremonies are a sight to behold. You certainly don't have to be a football fan to appreciate this event, which is aired on CBS starting at noon, Pacific time. Go Navy!

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