Jobs Report

Employers Add 128,000 Jobs in August
WASHINGTON (AP) -- Hiring perked up in August as employers added 128,000 jobs, pulling the unemployment rate down to 4.7 percent and flashing a Labor Day weekend message of an economic expansion that still has staying power.

The jobs report was pretty much as expected. Job gains were in healthcare, food services, financial services, and mining. Losses were in retail and manufacturing. Surprisingly, construction added jobs in the month. Hourly earnings were up just 0.1% which bodes well for inflation.

Stock traders seem to like the report with the Dow up about 80 points as of this writing. The bond market is essentially unchanged. This report further reinforces the idea that the Fed has gotten it right. The economy is slowing but not falling off a cliff into recession. We think that is probably right, but further weakness would be a cause for concern.