“Strong” Jobs Report More Politics Than Economics – Ep. 185

  • What a difference a week makes, or maybe and economic report
  • The two big reports that everybody seems to focus on are the GDP numbers and the jobs numbers
  • It seems that the weaker the economy is, as measured by GDP, the more jobs, somehow, the economy seems to create
  • We got the jobs report for July and just a week earlier we got Q2 GDP
  • As I spoke about on the last podcast, that number was basically half of what Wall Street had been anticipating – less than half
  • They were looking for 2.4 or 2.6 and we got 1.2
  • Even worse, we went back and revised down the prior 2 quarters to below 1%
  • That very weak number caused people to talk about the fact that the Fed can’t raise rates, the economy is weaker than we thought, are we slipping back into recession?…
  • Now fast forward a week, and we get a Non-Farm Payroll report that is higher than anticipated and now all of a sudden people are starting to talk about September rate hikes again
  • Obviously, withe the stock market on Friday rising to a new record high, I doubt the equity traders actually believe that Friday’s jobs report is going to produce a rate hike
  • Yet it doesn’t stop all the financial journalists writing about how this confirms that the recovery is on track, and the Fed can raise rates
  • This jobs report doesn’t confirm anything

Peter Schiff is an economist, financial broker/dealer, author, frequent guest on national news, and host of the Peter Schiff Show Podcast.

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