The jobs report closed last week with robust read outs of an official number that beat economist expectations. Below the surface, however, hours worked fell to levels often associated with recessions. This juxtaposition of more workers clocking fewer hours suggests that while employment figures are up, the quantity of work didn’t expand much.

The M2 money supply growth rate in the U.S. accelerated, marking the first time the monthly change exceeded a 5% annualized rate after several months of more moderate increases. A 5% money supply growth is a desirable target, as it reflects 2-3% growth in the economy with 2% inflation. Thus, the uptick in money growth is reassuring and supports the possibility that we will avert a hard landing for the economy.

I was pleasantly surprised by the Federal Reserve (Fed) decision to begin the easing cycle with a 50-basis point (bp) cut as the real economic data came in relatively stronger than expected.

Last week’s big day in the markets and for the economy was on Friday. I characterized the jobs report as being weakish—not disastrous but certainly not strong. The payroll report came in a bit short of expectations with weak lowered revisions to past reports, and although the unemployment rate adjustment was expected, the U-6 unemployment rate, a broader measure of labor underutilization, continued to rise indicating underlying weakness in the job market.

This week’s data reflects the resilience of the U.S. economy. Currently, the economy is holding steady with jobless claims in the 230,000 range and recent inflation data showing stability. Friday’s inflation report was essentially at expectations and indicates that the Federal Reserve (Fed) will make a rate cut of at least 25 basis points (bps) at the September meeting. Whether the cut is 25 or 50 will depend mostly on this week’s employment report.

Powell’s remarks in Jackson Hole were more dovish than I anticipated. Powell did not hedge; the clear direction of policy was lowering rates. The focus of the Federal Reserve’s (Fed's) narrative was shifting away from inflation risk to employment.