Today’s unemployment numbers came as a big surprise to Wall Street and Main Street alike.  The number of added jobs was significantly lower than forecasted by all analysts and lower than its recent averages.  To confuse matters even more, the unemployment rate dropped more than expected to a recent low of 6.7%.

These two numbers are in conflict even though the low unemployment rate may indicate a structural problem with the US economy as many unemployed workers drop off the pool of available workforce.  The big question is whether the Fed will re-think its QE tapering plan or if it will go along with it.  The other variable in this equation is the CPI number that at an official rate of approximately 1.2% runs much lower than the Fed’s target of 2%.

The most likely scenario at this point is that the tapering continues as planned but higher rates may be pushed further out into the future.

Stay tuned, 2014 will be interesting!