On Friday, the US Department of Labor released the July non-farm payroll numbers. They showed that employment rose by 163,000 while the unemployment rate was basically the same at 8.3 percent. Of course, this is an election year, which means that within minutes, the airwaves were flooded with spin about how this was good news or bad news, depending upon your political persuasion.
Truth in Money
How do you tell if the July nonfarm payrolls data is good or bad?
Among politicians, talk is cheap. There is no need to be accurate or correct, only to color the perception of the electorate in such a manner that you garner the majority of their votes. In other words, a politician, and their supporting ecosystem of political pundits and talk show hosts have no interest in what the jobs numbers, or other economic data, actually mean.
How can you tell when a politician is lying?
His lips are moving.
In fact, many of them have only the barest of understanding as to what the data actually says. Instead, they have their experts comb through looking for what can be characterized as good or bad and then run with whichever one supports their message.
However, in this case, there is one sure-fire way to know for certain if the data is good or bad.
The stock market is not a democracy. It does not require you to agree with it, or to vote for it. It doesn’t care about getting press access in the future, nor does it want a political appointment in your administration. The stock market moves money around according to the rules of capitalism. Politics are nothing but an expense.
In other words, the stock market is where you put your money where your mouth is, and today, the money says that the jobs report was good news. After the jobs data was released, the markets traded up big, currently up over 200 points. That isn’t some political conspiracy or spin machine, that’s real money making a real statement that the jobs situation, based upon this data, is better, not worse.
The July nonfarms payroll numbers report was good news for the U.S. economy.