Interesting note from Bruce Kasman of JPMorgan on the supposed retrenchment of the US consumer as Americans save, save, save (bold is mine):
I will give the last word (for today) on the jobs number to Wesbury & Stein:
The jobs report strongly supports our call that the economy bottomed in May and is now in the early stages of a V-shaped recovery. Businesses are shedding jobs at a much slower pace than earlier this year and we would not be surprised to see payrolls start to increase by the end of the summer. The speed of the turnaround cannot be ignored. … After the collapse of Lehman Brothers last September, monetary velocity plummeted, with both businesses and consumers pulling back from any activity they deemed unnecessary. Now, restaurants and bars are adding payrolls again, a sign that consumer behavior is returning to normal. While some analysts may focus on the rise in the unemployment rate to 9.4%, much of the increase was due to an increase in the labor force, which has risen by more than 1 million workers in the past two months. Without this increase the jobless rate would be a much lower 8.7%.
Media supporters of President Obama, such as blogger-columnists Ezra Klein and my pal Dan Gross, are eager to dismiss the rise in interest rates as being a negative verdict on the financial soundness of White House economic policies. This is understandable, especially since many of my colleagues seem eager to propel the narrative that the nation’s economic center has moved down I-95 from New York to Washington.
The American Recovery and Reinvestment Act is quite poorly named. First of all, the U.S. economy is already recovering even though maybe 5 percent of the $800 billion package has been spent. Plus, much of the spending will have nothing to do with reinvestment, as the Associated Press notes: