The much-anticipated jobs and U.S. unemployment figures from the Department of Labor came out to vindicate the bears, with a single caveat. In total, the U.S. shed 131,000 jobs in July; however, that figure included 143,000 temporary workers at the 2010 Census leaving their positions.
By contrast, the private sector added 71,000 jobs in July; figures that are meager, but still positive.
The figures also deeply revised June’s job-loss figures, from 125,000 to 221,000. After growth early in the year, the U.S. economy began to dial back as spring turned into summer.
U.S. unemployment was flat at 9.5 percent.
Stock index futures succumbed to the influence of deflation-fearing market bears, with the Dow Jones Industrial Average index futures down 82 points to 10,553, S&P 500 futures slipping 10 points to 1,113.5 and the Nasdaq 100 futures losing 15.27 points to 1,883.75.
However, the data didn’t decisively play into the predictions of inflationistas or deflationistas. The former fear that massive government stimulus will lead to currency chaos, while the latter see insufficient intervention and warn of a Japanese-style debt-deflation spiral.
The New York Times profiled two of the main apostles of these views, one from each camp. So far, the deflationary view seems to have more traction.
It will take decisive movement in the jobs market one way or another, though, for the debate to be settled.
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