In our payrolls preview last night we asked "just how bad will it get", and we got the answer moments ago when the BLS reported that in July, the US added just 114K payrolls, a huge miss to expectations of 175K and also a huge drop from the downward revised June print of 206K, now magically slashed to just 179K. This was the lowest print since December 2020 (at least prior to even more revisions)...

... and a 3 sigma miss to the median estimate of 175K.

Of course, these being numbers published by the corrupt Biden, pardon Kamala Department of Goalseeked bullshit, the previous months were revised lower as usual, with May revised down by 2,000, from +218,000 to +216,000, and the change for June was revised down by 27,000, from +206,000 to +179,000. With these revisions, employment in May and June combined is 29,000 lower than previously reported. It gets better because as shown in the next chart shows, 5 of the past 6 months have now been revised lower.

But while we have long known that the real payrolls number is far worse than reported, what was the true shock in today's "data" is the long overdue admission that the US is effectively in a recession because as the rule named for pro-Biden/Kamala socialist Cluadia Sahm indicates, a recession has now been triggered. The rule, for those who don't remember is that a recession is effectively already underway if the unemployment rate (based on a three-month moving average) rises by half a percentage point from its low of the past year. And that's what just happened, with the unemployment rate surging 0.6% from the year's low.

Developing