July job losses come in way lower than expected and in some ways even more important the June numbers were revised downward. Consequently, instead of ticking upwards as expected the unemployment rate edged down to 9.4 percent. Since employment is a lagging indicator, I think we can take this as a sign that Keith Gessen was right and Q2 of 2009 was the last quarter of contraction.
That said, relative to any baseline other than “expectations” this is still a crappy situation. We need to extend unemployment benefits, we need to let the rest of ARRA money flow out, and we need to maintain the Fed’s liquidity measures. The situation is still very tenuous, consumer spending is anemic, and you wouldn’t want a bout of unjustified optimism to push us back over the cliff.