The job report was revealed today... and to no surprise, it was another indicator signaling slow economic growth.
The US has added around 130,000 jobs in the month of September, which was lower than the usual 200,000 jobs added in prior year. The report has followed yesterday's SMI (non manufacturing report),which also showed slowed growth, and Monday's Manufacturing report, which indicated contraction.
These reports all screamed the deflationary forces that have began to act on the worlds largest economy. Even though these could be seen as red flags for the health of the economy, the stock market continued to show strength. After Mondays report, and leading into the announcement of the Thursday's report, the stock market strongly sold off as investor money looked to US Treasuries and Gold for safety. However, the market "miraculously" rebounded to regain its losses while traded back in positive territory. Who in the hell would have that much confident in a market that showed the recessionary ailments seen in this weeks' reports?
Could the US Federal Reserve have directed its backdoor stimulus towards its NY trading desk to buy stocks in an effort to maintain the illusion of market confidence? Honestly, I don't see many fund managers risking their clients retirements after the reports that were brought out.
Nonetheless, it has been expected for the US Federal Reserve to likely respond to the reports with lowered interest rates, to stave off deflation, in October. Cheap and easy money has been set to continue to encourage us as consumers to keep everything propped. After all, Majority of GDP comes from consumer spending. To really put it into perspective: manufacturing has typically influenced non manufacturing (services sector). Services sector has been from two thirds of consumer spending. Consumer spending has made up 68% of US economy!
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