U.S. Gains Crushes Expectations With 163,000 Jobs in July

    Yeah, I know, listen to me right? But economists expected 100,000, so this was 63% more... Is it wrong to describe this as crushing expectations? I don't see why.

     What's really encouraging is that for once, we saw the payroll numbers not come in lower than the ADP numbers. True, the unemployment rate did tick up to 8.3%. But what we seem to be seeing recently is that while the U.S. economy has slowed during the 2nd quarter, it has been by less than it was expected to.

     So the extreme pessimistic line is not being borne out.

     "The U.S. economy closed out an otherwise weak second quarter by creating more jobs than expected, with 163,000 new positions added, but the unemployment rate rose to 8.3 percent."

     "In all, the government said private payrolls added 172,000 positions — about in line with Wednesday's report from ADP and Macroeconomic Advisors — while government subtracted 9,000."

     http://www.cnbc.com/id/48480887

      So, if we didn't have government jobs falling but rather rising, we would now be seeing the kind of job growth to seriously cut down the unemployment rate. It's amazing but government jobs, at the state and local levels in particular have been procyclical-we were actually gaining government jobs during the boom years and have been cutting them during the recession.

     Though the President was killed for saying the private sector is "fine" it is true that it has seen consistent job creation starting in June, 2009. The weak link has been state and local government since the stimulus ran out.

    The part of policy that has been most wanting is federal money to the states. If that had even kept pace with what we saw during the Bush years, we would be seeing a much stronger recovery.

    Parenthetically you know different camps react differently to the news. Will those who desire more Fed QE see this as a negative as it now gives the Fed more reason to think maybe it's further action is not required?

    The Romney campaign is the one group of people who dread any good news coming out about the economy. No doubt they will try to seize on the 8.3% number in isolation from all other relevant facts.

   It may be that we are the Little Engine that Must after all. I know the numbers still aren't enough yet, but we you compare us to how bad Europe looks, it's amazing that we've managed to continue to grow at all. Now there are some who think that China may have bottomed-for them "bottoming" is 7.5% growth!