Wall Street closed at fresh all-time highs Friday because American employers cut 23,000 jobs last month—and the financial class treated that as great news, since a weaker labor market might delay Federal Reserve interest rate hikes and keep cheap money flowing to asset holders.
The stock market is not the economy. The S&P 500 rose 0.6% to 7,757.64, topping its record. The Dow hit 54,036.93. The Nasdaq surged 1.3% to 26,690.62. Every major index posted a second straight week of gains. Meanwhile, the same jobs report that sent traders popping champagne dimmed one of the brighter areas of the actual economy and added to worries about household spending while inflation stays hot.
Follow the money. The rally was built on lost paychecks. The AP reported that the 23,000 job cuts were unexpected, and the government revised June and May payrolls downward by a combined 103,000 positions. That is over 125,000 jobs gone or erased from the books. Wall Street's gain was Main Street's loss.
Inflation is not going away. The consumer price index for July is forecast to come in at 3.4%, easing only slightly from 3.5% in June. Inflation has held above 3% for most of the year—well above the Fed's 2% target and far above what working Americans can absorb when wages are not keeping pace.
Oil prices are climbing again, compounding the squeeze. Brent crude gained 0.8% to $84.23 per barrel, and the U.S. benchmark advanced 0.7% to $78.72. The AP reported the spike came after Israel rejected a Gaza ceasefire deal and Iran suggested it could bar vessels from hostile countries in the Strait of Hormuz. Yemen's Houthi rebels struck a Red Sea port, deepening fears over strategic shipping routes. Every extra dollar at the pump is a tax on working Americans driven by foreign conflicts and Washington's failure to secure domestic energy independence.
The institutional press barely pauses at the disconnect. Both outlets framed the jobs report as a complication for the Fed's
