Another Week of Mixed Reports
- A welcomed surprise was the nonfarm payrolls report, which came in well above consensus estimates registering an increase of 163,000 jobs in July. Household employment, however, dropped by 195,000 jobs and the unemployment rate edged a notch higher to 8.3 percent.
- One disappointing release was the ISM manufacturing report, which remained in negative territory for the second consecutive month. While disconcerting, it does not portend a recession and is consistent with our real GDP forecast of around 1.0 percent in the second half of the year.
Euro Uncertainties Continue to Rattle Markets
- The euro crisis continues to affect economic growth across the world and there is still no clear solution in sight.
- Markets have been very perceptive during the past week, trying to gauge the potential effects of the ECB president’s, Mario Draghi, comments that the institution he presides over would do everything in its power to defend the euro currency.
- The role of the ECB president is to defend the euro, so the market's reaction seems a little overdone. The biggest questio