The government reported this morning that the unemployment rate rose to 5% from 4.9% last month. Payrolls dropped by 17,000 which was below the consensus of an addition of 70,000 jobs.

This is more evidence that the economy is sputtering and is no longer creating new jobs. The falling unemployment rate from 5% to 4.9% is just statistical noise. The big deal in the report is that there were just 52,000 new private services jobs last month. The average for the past three months was 118,000.

This indicates that the business sector is very cautious. Now the question is, "can the Fed's cuts pull us out in time to avoid a recession of two down quarters?"