The Unemployment Report for August was released earlier today and it provided some interesting tidbits of information that might give us a read on the near term interest rate environment. As you know, the Federal Reserve’s $85 billion per month bond buying binge has helped keep interest rates across the board lower than they would be otherwise.

But as soon as the Fed slows or stops this form of stimulus, rates will climb even further. In fact, all the Fed has to do is hint that they might soon slow down their purchases or Wall Street pundits simply thinking the Fed will do the same. So let’s peel back the numbers.

The unemployment rate actually fell a bit, with a 7.3 percent rate. And while the rate did in fact fall, the number of nonfarm jobs created was underwhelming ta 169,000. Wall Street predicted anywhere from 180,000 to 200,000 new jobs so the lower number was disappointing. The rate is falling but job creating is tepid at best.

And according to a report on (1), the July jobs numbers were lowered by 60,000 to 104,000 as well. That’s a precipitous cut and while the economy isn’t losing jobs there are not enough new jobs created to stoke the flames for a recovering economy.

What will rates do in light if this new data? It sort of leaves the Federal Reserve’s hands a bit tied. There’s no clear cut evidence that the economy is on some sort of a roll but the news isn’t all negative either. It’s just, well, boring. Without economic signals that allow the Fed to conclude that their $85 billion per month “investment” is paying off, they’re pretty much left waiting for the next economic report. When the nonfarm payroll numbers approach 250,000 to 300,000 then you can expect rates to start another round of increases. But until such evidence arrives, it appears we’re still on a holding pattern.