After sifting through jobs numbers... well, it still looks awful

Some observations on this morning's weak employment report:

August was a wacky month: Let's see, the nation nearly went into default, the U.S. government lost its AAA rating for the first time, the stock market took a nosedive for a week or so, consumer confidence plummeted, and the European debt crisis acted up again. On the other hand, the default crisis was resolved, the stock market sorta recovered, and consumers were still buying cars and clothes. Bottom line: You can't base the economy on what happened in August - it was just too nutty.

Wait until September: Analyst Stanley Pierpoint advises some deep breathing (via Real Time Economics).

Is August's soft patch going to be a one‐month hiccup or a longer‐lasting weakness that gathers momentum? While the incoming August data is important, I would place much more weight on the yet‐to‐be‐determined performance of the economy in September. Second, what does Ben Bernanke have up his sleeve? We all know that Bernanke is predisposed to act, and today's data will only reinforce the resolve of Bernanke and the doves on the FOMC to push another button. In fact, I find it hard to imagine that the Fed would hold back from acting again over the next meeting or two.

Problem is hiring, not firing: Companies continue to resist bringing on more people, whether it's due to lack of demand, more efficient production methods, outsourcing overseas, or whatever. The nonsense in Washington certainly doesn't encourage business owners to put out the Help Wanted signs.

Growth is at a near-standstill: It isn't only the zero payroll gain in August. It's that the government revised down its July payroll from +117,000 to +85,000 and its June payroll from +46,000 to +20,000. That leaves the three-month growth average at about 35,000, which is awful.

Loss of government jobs: The decline in August was 17,000, but more telling is that local government has lost 550,000 since employment peaked in September 2008. There are lots of reasons for the job loss, but it's a reminder for anyone who believes sharp cuts in government is the answer.

What about California and L.A.?: State and local numbers are due out in a few weeks, but I wouldn't expect much difference in the general trend lines.