Dollars and Jens
Friday, August 06, 2004
July employment report
The numbers from the payroll survey were famously anemic — the number of jobs apparently created was actually less than the cumulative amount by which previous gains were revised down — but the household survey showed a gain of over 600,000 jobs, pushing the unemployment rate down to 5.5%. The surveys are as they sound; the payroll (or "establishment") survey comes from collecting numbers from a sample of businesses, while the household survey comes from polling households. It is argued by Bush backers that we are seeing a lot of new self-employed workers and new small businesses that fly under the radar of the payroll survey, but it's the payroll survey that is traditionally viewed as more important.

I really don't think the labor market looks robust enough to be a source of inflation yet, but the fed is likely — I'm sure you're shocked by this — to ignore my advice and hike the funds target another .25% at its meeting next week, as it did at the end of June. The market, after this morning's report, has priced in some probability that it won't happen, but not a considerable one; if any of the fed governors, especially Greenspan, makes any kind of public statement before the meeting, pay special attention.

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