Fuzzy jobs data is a weak argument for interest rate cuts

Everybody seems to agree that last Friday’s employment report was a loser.

And because only 130,000 new jobs were created in August, nobody would disagree that the Federal Reserve will likely cut interest rates next week to please President Trump and the financial markets.

Who am I to take the opposite view on this? Well, I’m going to take it anyway, because someone needs to be able to say “I told you so” when inflation hits hard, the Fed is unable to control it and the American public is irate and broke.

Fed chief Jerome Powell and his band of paranoid and browbeaten bankers will probably cut borrowing costs by one quarter of 1 percent — or 25 basis points.

And they will be doing so because everyone seems convinced that a recession is about to hit even though the economic figures are murky at best on that subject.

Here is some more murkiness.

Even as the Labor Department reported those 130,000 new jobs — about 40,000 fewer than expected — another survey conducted by the same organization showed a whopping 590,000 new jobs in August.

Yes, the Labor Department conducts two surveys each month. The so-called establishment survey is based on reporting by companies. It’s the one that showed just 130,000 new jobs.

The other is the household survey, conducted by knocking on doors and calling people at home. It showed 590,000 new jobs.

And that figure showed a booming labor market.

Going backward in the household survey, there were just 283,000 new jobs reported by people in July; 247,000 in June; 113,000 in May and a loss of 201,000 jobs in March. You have to go all the way back to February 2018 to find more jobs reported (731,000) in the household survey.

As my longtime readers know, I don’t trust any of the Labor Department’s numbers. They are always being revised.

But wage growth is also picking up, with a gain of 3.2 percent over the last year, compared with the 3 percent that was expected. You have to wonder if the Fed will be making a mistake next week.

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