Per twitter NFP 162K, Exp. 185K (Epic Fail)

[Perdogg]

NFP 162K, Exp. 185K— zerohedge (@zerohedge) August 2, 2013

[John W]

Maybe this administration wouldn’t have been re-elected to continue their hostility to business and profits if people had been able to see the full effects of such.

[Starboard]

Things would be a hell of a lot worse if the Fed didn’t supply the liquidity the system is demanding.
*********
Understand your point and agree about the hostile business environment we are currently in. While the Fed’s massive injections of liquidity into the system may have helped in the short run, its endless continuation will severely damage the economy in the long run. I think even Bernanke would acknowledge that. IMO the Fed’s stimulative actions reduce the incentive for the president and Congress to do anything about the fiscal and regulatory hell that they’ve created. In that sense, the Fed has become an enabler and its prolonged artificially low interest rates are causing distortions in the economy that we will come to regret down the road. Just my opinion. Regards.

[Wyatt's Torch]

Liquidity is all about timing. If the Fed doesn’t withdraw when velocity turns up then it can be very damaging in the form of inflation. But not injecting in the face of demand is worse i.e Deflation. Bernanke and a number of the governors have yp talked about the fiscal disaster that is Congress and the growth crushing regulations of this administration. Yes I agree that the Fed is essentially providing cover but its the right thing to do. Doing nothing would be a disaster.

As always I enjoy the discussion.

[Wyatt's Torch]

Totally agree. Problem is that when 50% of people are on the government dole its hard to get them to care about a business environment.

[Starboard]

There’s a very fine line between helping and enabling. Kind of like when parents unwittingly demotivate their kids by helping them out too much. :)

It will be interesting watching the Fed try to unwind its massive balance sheet. And I am very concerned that the market seems to be driven more now by the Fed than fundamentals.

We are rapidly closing in on a (nominal) $17 trillion national debt. Yet another disaster in the making.

Regards.

[Wyatt's Torch]

One of the most ironic things I have ever seen was in San Francisco in the late 90’s. out by Pier 39 there used to be floating platforms where the seals would sun themselves and tourists could watch them from close range. There were signs that said, “please don’t feed the seals as they will become dependent on acquiring food here and will not be able to hunt food as is their nature.”

I posted a chart of corproate earnings and the S&P 500 index and its a pretty good correlation. Companies are making money. Ours just posted out best quarter in five years.

[Wyatt's Torch]

Analysis from IHS:

Employment Report

The United States adds 162,000 jobs in July, and the unemployment rate falls to 7.4%.

Establishment employment growth in July was 162,000. While lagging previous months slightly, this performance does not provide enough new information to materially change the IHS US outlook for a slow acceleration of economic growth over the next few quarters.

Just over one-quarter of this growth came from retailers, suggesting that the current pace of consumer spending remains sustainable.

The headline unemployment rate fell from 7.6% to 7.4%. Employment levels from the household survey increased by 227,000, but the size of the labor force fell by 37,000, driving the decline in the unemployment rate.
A major contributor to this decline in the labor force came from those with a bachelor’s degree or higher (and who are at least 25 years old). While other segments saw an increase, this segment declined by 293,000 in July, although it remains 1.5 million higher than in July 2012. It is too soon to say if this is the beginning of a significant trend, but it bears watching going forward.

The average workweek declined by 0.1 hour, and average hourly earnings for all employees fell 2 cents to $23.98. Compared with July 2012, average hourly earnings and average weekly earnings have both increased by 1.9%.

This report muddies the debate among economic pundits regarding when the Federal Reserve might begin its tapering of its current QE program. The 0.2-percentage-point decline in the unemployment rate adds credence to a sooner vs. later argument, but other mitigating factors—a reduced labor force and near-term weakness in average hours and earnings—argue for starting this tapering in 2014.

Overall, this report is consistent with the IHS outlook for a slow acceleration of growth over the next few quarters. The report is broadly consistent with the three earlier reports that show monthly employment gains of 150,000–200,000. The report also does little to resolve the debate about the prospective timing of when the current QE program may be tapered.
From a macroeconomic perspective, we have seen two quarters of slowly accelerating growth from the fourth-quarter 2012 nadir of 0.1% to the second quarter’s 1.7%. This report suggests that the second half of 2013 will see a continuation of this trend: faster growth than 1.7%, but not enough to suggest that the economy has fully recovered from the recession that ended about four years ago.

The 0.2-percentage-point decline in the unemployment rate adds to the argument that the Fed might begin its tapering program in the second half of 2013. However, we note that the data are frequently revised, and that other mitigating data exist in this report that could contradict the apparent strength of the 0.2-point decline. Cogent arguments still exist for a delay of the onset of this tapering until 2014, which remains our IHS forecast.
While average hourly earnings were down slightly in July, overall earnings are growing slightly faster than inflation (as measured by the personal consumption deflator), suggesting that the current consumer spending contribution to economic growth will continue.

The report also provides some signposts to look for next month. It is unclear what individuals’ motivations are for dropping out of the labor force, but discouragement at finding a job certainly does not support faster economic growth. The fact that those with college degrees contributed so significantly to this result bears watching over the next few reports. If this decline continues, it would represent a sea change to the longer-term outlook. However, these data are very volatile, and it really is too soon to make any significant inferences.