Today’s jobs report isn’t great, but it’s better. For the moment, that’s good news–great news, if you consider the alternative outcome implied by yesterday’s steep market loss. Private-sector payrolls rose by 154,000 in July, nearly double June’s revised 80,000 gain. Although government jobs overall decreased 37,000 last month, the momentum in the private sector was enough to bring the unemployment rate down ever so slightly to 9.1%. In short, we dodged another bullet. There are still plenty of challenges ahead, as there have been all along, but today’s payrolls report for the private sector is strong enough to keep the recession risk at bay, if only on the margins and just long enough until the next data point arrives.

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Odds of double-dip recession grow
MercuryNews | Aug 4
In a report titled “Markets tumble, recession alarm bells ring,” consulting firm IHS Global Insight Thursday put the odds of a new recession at 40 percent. Vanguard economists are estimating the odds of a double-dip recession at around 35 percent to 40 percent, up from 30 percent last year, [Roger] Aliaga-Diaz [Vanguard Fund senior economist] said. Economists still consider the most likely scenario to be a very slow-growing economy that feels like a recession, but isn’t one officially.
NY Fed Model: 1-in-125 Chance of 2012 Double-Dip
Carpe Diem (Professor Mark Perry) | Aug 4
The New York Federal Reserve updated its “Probability of U.S. Recession Predicted by Treasury Spread” this week with treasury yield data through July 2011, and the Fed’s recession probability forecast through July 2012. The NY Fed’s Treasury model uses the spread between the yields on 10-year Treasury notes (3.00% in July) and 3-month Treasury bills (0.04%) to calculate the probability of a U.S. recession up to twelve months ahead (see details here) using the spread between those two yields (2.96% in July).

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