Nonfarm payrolls increased by 103,000 versus consensus of 60,000. Private sector hirings increased by 137,000. August payrolls were revised higher by 57,000 and July was revised higher by 42,000. Despite these readings the unemployment rate remains at 9.1%. But in the bigger picture it would appear that we are almost certainly NOT in a recession since a peak in employment is a necessary element.
How does this affect our investment posture? It makes me reevaluate our bearish TZA holding as the bottom is clearly not falling out of the economy. Investor sentiment is horrid (which is a good thing), it would appear that the majority consensus is of the thinking parallel to Nouriel Roubini aka Dr. Doom. Corporate earnings are still coming down but not at a pace that would imply recession. Its still not a good time for individual stocks for longer term investors but the recent data may mean a sideways moving market is to be expected with occasional whacks from Europe.
Long TZA