Indicators confirmed that economic activity remains quite anemic these days. The manufacturing sector remains mired in recession and the service sector is only marginally better. The employment report was weak on the whole and will generally set the tone for a fairly weak month. After all, both industrial production and personal income are partly derived from the employment figures. Both will look ugly for August.

A consensus is developing that the Fed may need to cut rates a couple more times this year. A 25 basis point reduction was already factored in for the October meeting. Many economists are beginning to predict that another 25 basis point rate cut will come at the subsequent meeting as well.