The eagerly anticipated jobs report for August has come in and it is a disappointment … sort of. Expectations were for an increase of 217,000 jobs. The number was … 173,000. But
… the jobless rate dropped to 5.1 percent, a level that the Federal Reserve considers to be full employment.
And
Fed policy makers meeting in less than two weeks will weigh resilient U.S. employment conditions against the recent turmoil in world financial markets as they debate the timing of any interest-rate increase.
So the odds of a Fed move to increase interest rates would seem to have improved. But there are, as always, risks. In 1937, the Fed called it wrong and managed to bring a recovery from the Great Depression to its knees and produce a “recession within a depression.”
One looks at the divergence between the expectations and the reality in this jobs report and wonders.
