Markets pay undue attention to the monthly US payroll numbers, which are at best a coincident economic indicator and are often revised heavily.

The latest figures show a rise in private sector employment of 235,000 in the three months to August, down from 450,000 in the prior three months. Such a slowdown was to be expected given a fall in GDP growth from 3.7% annualised in the first quarter to 1.6% in the second.

Commentators were relieved that private jobs continued to increase in August, by 67,000, with some having feared a contraction, signalling the dreaded "double dip". In fact, such an increase is perfectly compatible with the economy having entered a recession last month, allowing for lags and the usual margin of error. The news content of today's release, therefore, is minimal.

Monetary trends, unlike labour market developments, lead demand and output, typically by about six months. A firmer reason for optimism that the economy will avoid a double dip is a recent stabilisation and pick-up in real M1 growth – see first chart.

In other news today, the UK purchasing managers' services survey for August confirmed the message of slowdown delivered by the earlier manufacturing survey. A weighted average of the new orders / business indices from the surveys suggests a fall in GDP growth to about 0.5% in the current quarter from a break-neck 1.2% in the second quarter – second chart. This is hardly grounds for MPC doves to push the "panic" button, particularly as survey inflation indicators remain elevated.