“Kansas City Fed President Thomas Hoenig and Dennis Lockhart of the Atlanta Fed said they hadn’t seen sure signs of a housing spillover into the broader economy”

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“The report was much weaker than economists were expecting. They were forecasting payrolls to grow by 110,000.

The drop of 4,000 jobs in August was the first decline since August 2003.”

Somehow I think this would rate as a “sure sign” housing is spilling over into the broader economy. This is getting scary, gold is north of $700 and I just looked at the US Dollar index which just broke 80 and bounced back over, plus oil is over $76. That data will keep the inflation hawks at the FED vigilant. But the sudden drop in jobs will prompt the FED to move on the FED funds. The FED has to keep as much powder dry as it can due to the slow nature of the correction in the credit markets. IMO you will see a 25 bps cut on Sept 18 the market will expect 50 bps and get pissed.