The employment report, probably the single most important economic report there is, came out this morning, and the headline number on job creation was not good at all. In June, the economy added 213,000 jobs, and the expectations for July included another 193,000. Instead, we got only 157,000. You might see a fair amount of angst in the coverage today.

July was a great month for financial markets. In the U.S., the Dow, S&P 500, and Nasdaq were all up, and after a terrible June, both developed and emerging markets bounced back. What fueled this performance? Strong economic data, in particular GDP growth, which came in at 4.1 percent for the second quarter, nearly double what it was in the first. Job growth remains strong, corporations are beating sales and earnings expectations, and even the Fed is more positive on the economy than it has been in some time.  

As we begin August, let’s take a look back at the markets in July, plus what to expect in the month ahead.

With the sharp drop in Facebook stock on disappointing earnings—and ditto for Netflix—two of the market leaders have now stumbled, leading many to ask whether the problem widens to the market as a whole. In fact, several analysts from leading banks have been quoted as saying a new bear market is on its way sometime soon. Should we be boarding up the windows and stockpiling drinking water?

Last week gave us a look at a wide range of data, starting with housing. This week will be just as busy, concluding with an always important look at employment.

Well, the GDP report came out this morning. The GDP is an attempt to measure the size of the economy. Although the GDP has its problems, it is nevertheless reasonable to use it as a consistent baseline as to what direction the economy is moving. I have seen coverage today both on how great it is and on the many problems. Let’s take a more detailed look to see which side is right—or whether both have good points.

Once again, today we find ourselves with no single overarching story. But there are a couple of quick hits from the financial news worth noting. Let’s start with the headlines—literally.

I’ve spent the past couple of posts painting a picture of how dire the situation is with the deficit and the debt—and it really is. But now we can turn to the real questions: is this a solvable problem or not? If so, what would it take? Indeed, there are a couple of ways the problem can be solved. Some are painless and others not so much. Let’s start with the easy ones.

I last looked at whether the housing market might be rolling over back in March. At that time, I concluded that the industry was indeed past its peak. I also determined that we were still not close to the end of the cycle. With all of the weak data we have seen from this sector recently, I thought it was a good time to take another look.

Last week was a busy one for economic news, with wide-ranging reports including retail sales, industrial production, and manufacturing. We also got testimony before Congress from Fed Chair Jerome Powell, which shed some light on how the Fed is likely to react to rising inflation. This week, we will also cover a lot of data, starting with housing.