The economy has been taking two steps forward and one back. We’re getting there but we keep shooting ourselves in the foot. Tomorrow, we might get some confirmation on where we’ve been Target Inflation Rateand where we’re going. The Unemployment Rate for September will be released as well as the new number of jobs created. The unemployment rate, the least watched of the two although it is the headline number, is expected to remain below 5.0% at 4.9%. What is more important is the number of new jobs created. Over the summer, job creation was relatively strong yet August new jobs seemed to take a breather.

 

Analysts are expecting to see a number around 190,000 new jobs yet we’ve still yet to hit any significant stride. When the economy is rolling, job creation reaches 300,000 per month and more. We haven’t seen that in years. August created 151,000 new non-farm payroll jobs, still well below a strong economy yet at least we’re not shedding jobs each month. 300,000+ payroll numbers would signal strong economic growth yet like jobs, the GDP has been below 3.0% for more than a decade.

If we do see yet again sub-200,000 new jobs tomorrow, that might just throw more water on the prospect of a rate increase this year. And even if we did see one, it will likely only be by 0.25% and unlikely we’ll see a bump in December. That tells analysts that stocks will still remain in their current levels without any significant moves either way. As well, those with bonds will continue to see marginal yields well into next year. On the other hand, if we are surprised by tomorrow’s report and we do see numbers near 250,000 or above, all of this can change. Stay tuned.