4.1% Unemployment Is Hiding Something

There are quite a few things going on right now in the broader markets, from the bond rout in Japan to the ongoing conflict in Iran (which appears to be escalating again), and the odds of a hike at the next 4.1% Unemployment Is Hiding Something Summary - A relatively stable unemployment rate of around 4% doesn't necessarily mean that the labor market is doing fine. - Back in July, the unemployment rate declined from 4.2% to 4.1%. However, payrolls came down as well by -23k. - I think the missing 264k people from the labor force explain the contradiction. - On top of that, some analysts projected that America may need fewer than 10,000 new jobs a month to hold unemployment steady. - To me, all this suggests that the unemployment rate is likely to remain stable in August (around 4.1%). Therefore, this doesn't help the odds that the Fed keeps the benchmark rate where it is in September. This article was written by Analyst’s Disclosure: I/we have a beneficial long position in the shares of IWM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. I may initiate a short position in the securities discussed in this article over the next 72 hours. I am not a registered investment adviser, broker, dealer, or tax professional. This article, including any comments or replies I post, reflects my personal opinions only and is provided for informational and educational purposes. Nothing I write is investment, legal, tax, or financial advice, or a personalized recommendation to buy, sell, hold, or short any security. My views may change without notice. Nothing I write is tailored to any reader’s objectives, financial situation, risk tolerance, or portfolio. Investing involves risk, including possible loss of principal. Readers should conduct their own research and consult a qualified professional before making investment decisions. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.