JEREMY HOBSON: OK, let’s get to the jobs report that came in this morning from the government. It said the economy created just 18,000 jobs last month — that’s much lower than expected. It also said the unemployment rate ticked up to 9.2 percent. President Obama is going to make a statement in the next hour.
Let’s get some analysis from our regular Friday guest, Chris Low, chief economist with FTN Financial. He’s with us live. Good morning.
CHRIS LOW: Good morning.
HOBSON: Well Chris how could this report from the Labor Department be so bad?
LOW: Boy, it’s just wall-to-wall ugly — the report. I went through category after category looking for some bright spot to put in my note to our sales people this morning. And there just isn’t much to cling to. You know we have an increase in the unemployment rate. Only 18,000 jobs as you said. And weakness in some categories where we don’t normally see weakness — health care and education for example was flat in June. We haven’t seen anything but increases for the last couple of years. So it’s sort of wall-to-wall ugly I’m afraid.
HOBSON: Well what about these people who blame Japan, and European debt crisis, and high gas prices — these so-called transitory factors?
LOW: Well, some of that was to blame. For example there were only 6,000 manufacturing jobs created and that’s probably at least partly because of the weakness in auto manufacturing. But because there were no industries really that stand out as strong this month it looks to me like there’s something bigger going on. Just for example, there were 15,000 job losses in finance, which can’t be tied directly to any of those three factors.
HOBSON: And finally, Chris do you think this will have any impact on the debt ceiling debate that’s going on in Washington?
LOW: Well, I hope it does in a way. I think if there’s one political message to take away from this, it’s that it’s imperative these guys don’t drop the ball. They have got to come to an agreement. And they have to do it before the August 2 deadline. Because the economy is clearly in a really fragile place.
HOBSON: Chris Low, chief economist with FTN Financial, thanks as always.
LOW: Thank you.
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