Morning Report - meh jobs report

Vital Statistics:

	Last	Change	Percent
S&P Futures	1698.2	-2.0	-0.12%
Eurostoxx Index	2801.2	-7.4	-0.26%
Oil (WTI)	107.4	-0.5	-0.42%
LIBOR	0.267	0.001	0.38%
US Dollar Index (DXY)	82	-0.336	-0.41%
10 Year Govt Bond Yield	2.61%	-0.09%
Current Coupon Ginnie Mae TBA	104.3	0.6
Current Coupon Fannie Mae TBA	103.8	0.6
RPX Composite Real Estate Index	200.7	-0.2
BankRate 30 Year Fixed Rate Mortgage	4.46

If you went to sleep just before Wednesday's GDP report and just rolled out of bed, you would be forgiven for asking what all the hoopla is about. If not, you would be suggesting that Webster's put the 3 day intraday chart of the 10-year bond yield as the illustration for the word "whipsaw."

Bonds are rallying hard after a weak jobs report. Stocks are selling off as well. TBAs are up 3/4 of a point. 

The July jobs report sent yields down 14 basis points (yes) on disappointing numbers. 162,000 jobs were added in July, and June was revised downward. The unemployment rate fell from 7.6% to 7.4% as the labor force participation rate dropped from 63.5% to 63.4%. Hourly earnings ticked down month-over-month and weekly hours fell. Overall, a "meh" report, with the caveat that summertime jobs reports tend to be volatile and no matter how hard the Bureau tries to make seasonal adjustments for all the things going on (seasonal work, students, teachers, etc) it is a difficult task. 

Given that GDP growth has averaged about 1% over the past 3 quarters and the labor market is improving at a snail's pace, it makes you wonder what the Fed is thinking about when they say they want to taper this fall.

The Fed seems to alternate between characterizing growth as "modest" and "moderate."  Ever wonder what the line between the two is? The WSJ attempts to parse.