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Investors who expected that the July jobs report would compel congressional officials to avoid a collapse in negotiations on a new coronavirus relief bill were met instead with data that seems likely to entrench Democrats and Republicans in their positions.
Just consider the headline number: U.S. payrolls increased by 1.76 million in July. On the one hand, that beat estimates for a 1.48 million gain, but it's also down from a 4.79 million pickup in June and 2.72 million advance in May.
Is this a sign that the economic recovery is better than expectations or an indication that progress is sputtering?
Either way, the jobless rate remains in the double digits, which would seemingly bolster the argument of Democrats that Congress needs to extend the $600-a-week supplemental unemployment insurance payment from the last stimulus.
But then there are the details of the report.
Aid for state and local governments is reportedly a chief source of antagonism among House Speaker Nancy Pelosi, Senate Democratic leader Chuck Schumer, White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin, with Democrats warning of huge public sector layoffs without an infusion of funds.
There was an encouraging upswing in the number of employees on state and local payrolls in July, and even if that's mostly just noise from seasonal adjustments, it could very well embolden Republicans to stand firm against open-ended grants to states and municipalities.
Or, perhaps not. The benchmark 10-year Treasury yield was little changed Friday, hovering around 0.53%, and the rest of the yield curve barely budged. The S&P 500 Index fluctuated.
