Why Everyone's Freaking Out About Jobs Report

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Sometimes, the unemployment rate leads you astray.

The Friday jobs report looks decent—payrolls increased by 169,000 in August, while the unemployment rate dropped by a tenth of a percentage point to 7.3 percent. This fits the general narrative of economists who expect the Federal Reserve to pull back on its monthly adrenaline shot of $85 billion in bond purchases.

Except that the underlying data should raise severe concerns about the economy.