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Private sector employers added only 71,000 jobs in July, according to Labor Department numbers released this morning (Aug. 6). That's three straight months of anemic private job growth, portending a weakening economy. Overall, the economy lost 131,000 jobs in July, mostly because 143,000 temporary census jobs ended. Even worse, the number of private job gains for June was revised down to 31,000 from 83,000. The unemployment rate remained at 9.5% and the underemployment rate, including unemployed who have given up looking for work and those working part-time who would prefer to work full-time, stayed at 16.5%.
Stock market futures dropped sharply at the news. However, that could change. Economists believe the Federal Reserve may be forced to resume quantitative easing, or the purchase of long-term paper to drive long rates down artificially. Those rates are already down to levels not seen for decades. The Fed is already loaning short-term money to banks at effectively 0%. Stocks often react more to liquidity than the state of the economy.
Private sector employers added only 71,000 jobs in July, according to Labor Department numbers released this morning (Aug. 6). That's three straight months of anemic private job growth, portending a weakening economy. Overall, the economy lost 131,000 jobs in July, mostly because 143,000 temporary census jobs ended. Even worse, the number of private job gains for June was revised down to 31,000 from 83,000. The unemployment rate remained at 9.5% and the underemployment rate, including unemployed who have given up looking for work and those working part-time who would prefer to work full-time, stayed at 16.5%.
Stock market futures dropped sharply at the news. However, that could change. Economists believe the Federal Reserve may be forced to resume quantitative easing, or the purchase of long-term paper to drive long rates down artificially. Those rates are already down to levels not seen for decades. The Fed is already loaning short-term money to banks at effectively 0%. Stocks often react more to liquidity than the state of the economy.