On average, there are about 160 economic reports each month.  Those are just the reports from the Federal government, various state governments, agencies, and trade associations.  That doesn’t include reports from the many banks, brokerages, and other commercial companies.  I would guess the combined total approaches a thousand reports per month.

Can the average person process that many reports?  Of course not!  Pick your favorite and follow those.  The one report that Wall Street follows most closely is the Jobs Report or Employment Report, which is published on the first Friday of each month.  That would be tomorrow . . .

Wall Street is expecting that about 156 thousand new jobs were created in May.  If America created more jobs than expected, you would think that would be good news, and the stock market would rise.  You would also be wrong.

Tomorrow’s report has been made even more “market-moving” by the various Fed members who have been warning that the next interest rate increase could easily be this summer, as in June or July.  If the Jobs Report is good, they can argue the economy is strong enough to withstand an interest rate increase, which will upset the stock market.  (Remember:  increased interest costs are a direct hit to the net profit line.)  This may be the Jobs Report that pushes the Fed to raise rates.

I think an increase in interest rates would be good, in terms of managing the Fed over the long term, so they will have ammunition for the inevitable next recession.  I hope they do raise the cost of borrowing.  After all, when was the last time you invested in a certificate of deposit?  Besides, the Fed would improve their standing with Libertarian wing of the Republican Party, which is more important than most people realize.

But, that view ignores the rest of the world.  The IMF is begging us not to raise borrowing costs, as that might slow down the world’s economic engine — the U.S.  In addition, the June Fed meeting will be shortly before the Brexit vote in England, which reduces the probability of an interest rate increase in June to zero, in my opinion.  However, July remains a real possibility, which makes the July Jobs Report even more earth-shaking than tomorrow’s report.

When the Fed raised rates last December, they said they expected to raise rates another three or four times this year.  I predicted one more increase would be all we’d see in 2016.  July is probably it!