A Different World

215,000 jobs created in July, unemployment rate remains at 5.3 percent

The economy continued the longest streak of private sector monthly job gains - 65 consecutive months - in U.S. history in July, with 215,000 new jobs and a flat unemployment rate of 5.3 percent.

Here’s how the guys at the Wall Street Journal blog are discussing the news.

Immediately after the jobs number was released, the futures on Wall Street began to fall further. And the market has already been on a recent losing streak. Why? Because good news means that the Federal Reserve is likely to increase rates later this year, maybe even next month.

For a long time in this recovery, the stock market was soaring, in part, because the overall economy was doing so poorly it was obvious the Fed would keep measures in place to keep the economy afloat, including extremely low interest rates. Now that the economy has found its footing, the Fed is trying to find the best way to pull back slowly and responsibly. Given that there is not much inflation, the Fed can decide to just hold things where they are until wages take off.

I don’t know why that’s not the plan, but the guys on Wall Street seem to believe it’s not. When the economy was cratering in 2008 and 2009, I stopped looking at my 401k quarterly reports because they were so awful. Since then, I’ve seen the value in that account grow exponentially. For the next few months, if Wall Street keeps responding to good news like this morning’s jobs report by having sell-offs, I may tuck the 401k reports away again.

Maybe after that, Wall Street will cheer when more than 200,000 Americans are getting jobs every month.

Update: After that early downturn, futures on the market turned a little positive. We’ll see how things shake out the rest of Friday, and beyond, as people continue trying to read the tea leaves on the pending Fed decision.