Better Job Numbers Mean Rate Cuts on Standby

September job numbers showed an increase of 110,000 of non-farm payroll jobs. This was higher than analysts estimates of 100,000. But almost as important was that August's job numbers were revised to show a gain of 89,000 versus the -4,000 that was initially reported. Now while that number was surprise, most of the difference in jobs was due to Government hiring, which can be volatile.

Unemployment did edge up to 4.7% and personal income increased .4% to an annually amount of 4.1%. None of these numbers really speak to a weak employment sector.

The stock market is trying to price in lower earnings estimates for the third quarter in financials and retail but have already (within a period of about a week, especially in financials) started to eye the fourth quarter earnings thinking they will be better. If in deed they are better in the next quarter. If Q3 earnings aren't as poor as expected (which is what I fully intend on seeing) and employment remains strong...there is no reason for the Fed to cut rates anymore at this time.

The dollar has really faltered in the last month with other countries central banks either staying pat with rates as is or increasing rates (there were a couple of smaller economies that lowered rates also). A low dollar will put pressure on any imports we buy...including oil. So expect to pay a little higher at the gas pump just because our dollar doesn't go as far as it did just last month.

I also wrote about A New Way of Looking At Inflation over at Nesteggr. Check it out. Basically, we are in a global economy now that has a growing middle class that can afford a more varied diet than ever before.