I won't spend much time on these job figures... they all are starting to sound very familiar as we show very little progress in creating employment in the country.  People are going to try to find gems in temporary employment (which is supposedly a leading indicator but has failed this time around as corporations now are replacing full time employees with temps), the work week, hours worked, blah blah.

When you take a step back we are in terrible shape in employment - after such a start drop off we should be adding 250-400K jobs a month at this point.  We are not... to debate 32,000 jobs versus 132,000 is really a moot point, especially when we know the government is 'creating' (via the birth death model) tens if thousands of jobs each month in businesses too small to measure even as small business is suffering the worst in the country.  Not to mention most of these numbers are getting revised down after the fact - which we saw today for the past 2 months.  So let's now waste much time here - the labor force participation remains at historical lows, and we are in serious trouble on the employment front but as I've said many times... less workers = more profits for corporations so as 'cold hearted speculators' there is a silver lining.  Especially if it means free and easy money!

p.s. anyone celebrating the 'growth' of 36,000 manufacturing jobs needs to remember the auto companies did not shut down in July as they usually do so seasonality is completely off - the same issue we highlighted on weekly claims.  (21K of theses +36K jobs were in auto)

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What does it mean for the market and the Fed?  Short term the S&P 500 has two support levels to watch, the 200 day simple moving average of 1114 and then below that 1100.  A break below 1100 would change the complexion of the game once more, but until we get there shorting remains a daytrader's game.

More important is the Fed meeting.  I've ignored these meetings for many months in a row because they have become non events.  Everyone knows the language of easy money won't change and aside from an adjective changed in paragraph 3, sentence 5 there is nothing to review.  However, the stakes are changing.  The market is now begging for more quantitative easing so it can take Ben's easy money and go run up risk assets.  The market seems to think QE is going to happen next week.  I would be shocked.  You might get some language changes but Bernanke does not seem yet to be at the stage to go the full monty and I'd be surprised if it happened before the elections.

So unlike many other meetings over the past year, there could be a divergence between market expectation versus what the Fed is ready to deliver.  Hence the tail risk from next Tuesday's announcement is something to monitor... for the first time in a long while.