Wall Street Greek welcomes back our belly-filled readership from the Labor Day holiday. We hope your spread was as good as ours, which of course also included a few Greek dishes, like Mamma Greek's best pastichio. So now you understand why this week's copy is uncharacteristically late, as it took awhile to digest the massive portion we downed!

A day late, but you should not be a dollar short if you've been reading the Greek this year. The shortened week ahead offers an important glance into the state of the labor market, and thus might provide some insight into the direction of the economy. Last week, we outlined our expectation of the Fed and its upcoming September policy meeting. We believe the Fed will cut its target rate by a half a percentage point. However, this week's data from ADP and the Labor Department will go a long way in either allowing for that possibility or making it more difficult for the inflation-centric Fed to act.

Last Friday, after our review of the President's proposal we picked through the Fed Chairman's speech from Jackson Hole. As a result, we gained confidence in the Fed boss... an ounce of it anyway. It seems clear that he agrees with our line of thinking now, but we're not sure if he got there on his own or after some meaningful nudging from the President or Congressmen Dodd and Frank. The concurrent timing of the President's announcement certainly showed how important the problem's resolution is to the administration, and rightly so. The election of another Republican, or the entry of a Democratic administration may rest on the fate of the economy.

The week ahead:

Tuesday started the business week off with two important economic reports. In his Jackson Hole speech, Bernanke noted that the Fed would be closely following more relevant recent data over more dated material. For whatever reason, the Fed has not seen the signs of consumer softening the Wall Street Greek has since we first began authoring articles nearly a year ago. That same reasoning must be behind the Fed's current focus on August numbers and indicators over July's results, since it seems to believe its current problems are aberrations or born from market induced panic. Actually, there remains a large group of experts and reporters of experts who believe current economic issues are the result of self-fulfilled prophecy. Others would call it logical result! For us, it's what makes Mozart so intuitive. Even if you've never heard a particular piece, you intuitively know what the next note is. Those of us in tune with this frame of thought understand the dynamism of the market, and can foresee what's around the corner. There's nothing mystical about it; rather its something rythmic.

Construction spending declined 0.4% in July, versus expectations for no change. Well, it's about time! It looks like the homebuilders have finally laid off all their illegal immigrants and are starting to work through the first traunches of U.S. citizenry. Well, actually June spending fell 0.3%, so there goes the theory of sudden trouble. What's even more frightening to us is the fact that nonresidential construction rose. Remember, we anticipate consumer softening could expose a saturated retail environment that would need to consolidate; this would drive a downturn in commercial construction if a credit crunch does not do it all by itself. In any event, we do not believe now is the time for new shopping center addition. And as for housing, construction in the housing segment declined 1.4%, as homebuilders were finally forced to cease construction and consolidate operations.

The Institute for Supply Management released its August index, and at 52.9, it still represents an expansionary state for the manufacturing sector. Still, as we stated in our daily copy, direction and rate of change are more important than the static of level. The direction of manufacturing, as indicated by the ISM data, is negative. July's index measured 53.8. We continue to expect the manufacturing sector to be the last signal, perhaps a late one, in indicating recession. U.S. manufacturers benefit from the strength of international demand, which is supported by the weak dollar.

Motor vehicle sales were reported to be 12.6 million in August, ahead of consensus expectations for 12.0 million and up from July's 11.5 million. Tuesday's earnings schedule included Avanex (NASDAQ: AVNX), Champps Entertainment (NASDAQ: CMPP), Donaldson (NYSE: DCI), Finisar (NASDAQ: FNSR), Guess (NYSE: GES), Mitcham Industries (NASDAQ: MIND), Mobile Telesystems (NYSE: MBT), NCI Building Systems (NYSE: NCS), Wimm-Bill-Dann Foods (NYSE: WBD) and several foreign firms.

Wednesday led off with the week's flood of jobs data with reports from two key sources. ADP Employer Services reported job additions in the private sector only increased 38,000 in August, after a revised 41,000 increase in July. Detractors of the ADP report are now pointing out its notoriety for revision, but we note that the report has been much more accurate since its producers revamped the process and figure. We also believe that it has been short as a predictor. Still, it has generally accurately predicted the state of things, later agreed to by the Labor Department's report that regularly follows it. ADP's figure is its lowest reported since June 2003.

There was a second bit of evidence of economic trouble provided on Wednesday morning by Challenger, Gray & Christmas. The group reported that planned layoffs soared 85% in August. Most of the weakness was attributed to the financial sector, but we see the retail sector taking the baton soon enough. As consumers put the skids on spending, consolidation will have to take place in retail and other consumer sensitive areas.

ICSC-UBS reported weekly same-store sales figures on Wednesday, showing a continuation of soft trends. Week-to-week sales rose 0.2%, while sales increased 2.3% year-over-year. Trends were running much hotter just a year ago. Also on Wednesday, pending home sales were reported down 12.2% in July.

At 2:00 PM, the Fed's beige book was released. The book provides anecdotal evidence on economic conditions, and is put together by a revolving list of the twelve regional reserve banks two weeks prior to each FOMC monetary policy meeting. Clearly, the report takes on the flavor of the reporting regional body, so let's hope Bill Poole isn't authoring this next copy! The Fed said the economic impact of credit market turmoil has been limited, and that the economy has continued to expand. Not exactly the kind of discussion conducive to a significant Fed action in a couple weeks.

U.S. Bancorp (NYSE: USB) is holding its investor day on Wednesday, while the earnings report schedule includes ABM Industries (NYSE: ABM), ADC (NASDAQ: ADCT), AeroVironment (NASDAQ: AVAV), Altera Corp. (NASDAQ: ALTR), Casella Waste Systems (NASDAQ: CWST), Casey's General Stores (NASDAQ: CASY), DSW Inc. (NYSE: DSW), Enel SpA (NYSE: EN), Imergent (AMEX: IIG), J. Crew Group (NYSE: JCG), Martek Biosciences (NASDAQ: MATK), Mediware Information Systems (NASDAQ: MEDW), Nevada Gold & Casino (AMEX: UWN), OSI Systems (NASDAQ: OSIS), Rex Stores (NYSE: RSC), Sport Supply Group (AMEX: RBI), Sycamore Networks (NASDAQ: SCMR) and a few more.

Thursday should offer up quite a bit of newsworthy information. The European Central Bank is meeting and is widely expected to keep rates steady, while the Bank of England is seen doing the same. Our own Fed offers up a slew of speakers from its group of governors, including perhaps the markets' least favorite, William Poole. We say this because we fear Poole's tongue since his now infamous statement that the Fed would not act outside of a "calamitous event." We simply viewed the statement inappropriate and unnecessary. Fed speakers must be very careful of their word usage in between official policy statements, and his words were especially ill-conceived in our view.

The Institute for Supply Management will report its non-manufacturing index on Thursday, and Bloomberg's consensus of economists anticipates a reading of 54.5 for August, compared to 55.8 recorded in July. Remember, the service sector drives the American economy, so this data is much more significant than the manufacturing survey released earlier this week.

The revision to second quarter productivity is scheduled for 8:30 a.m. release on Thursday, and the consensus sees a 2.5% quarter-to-quarter improvement and a 1.5% increase in unit labor costs. Speaking of labor, some more information reaches the market on Thursday, and it will not get as much attention as Wednesday and Friday's news. However, the Monster Employment Index will be reported. We view the index as the new age "Help-Wanted Index," since most job search is done online nowadays. The metric rose earlier this year, but has since plateaued. June's 186 measure, or July's 183 reading, may not be surpassed for quite some time, in our view. Weekly Initial Jobless Claims caught our eye last week, and the market's as well. We suspect the rise of 9,000 in the league of newly unemployed was a sign of things to come. The consensus is looking for a reading of 330,000 this time around, compared to last week's 334,000. Weekly readings can be bumpy, so we suggest paying closer attention the trailing four week figure.

Retailers report August sales around this time of the month, and the monthly Chain Store Sales Report is due for release Thursday. We fully expect retailers to post a disappointing "back to school" season this time around, and we would remain underweight consumer discretionary shares now. We noted our industry weighting preferences in a publishing weeks ago, and we plan to soon incorporate a section into our site providing our current view on specific industry sectors.

H&R Block (NYSE: HRB), Millipore (NYSE: MIL), National City (NYSE: NCC), TempurPedic (NYSE: TPX) and Juniper Networks (NASDAQ: JNPR) are meeting with analysts or investors on Thursday. The day's earnings schedule includes Alloy (NASDAQ: ALOY), America's Car-Mart (NASDAQ: CRMT), American Software (NASDAQ: AMSWA), Campbell Soup (NYSE: CPB), Cascade Corporation (NYSE: CAE), CDC Corp. (NASDAQ: CHINA), China Power (2380.HK), Dolan Media (NYSE: DM), Duckwall-ALCO Stores (NASDAQ: DUCK), Fleetwood Enterprises (NYSE: FLE), Hayes Lemmerz International (NASDAQ: HAYZ), Hooker Furniture (NASDAQ: HOFT), Hovnanian Enterprises (NYSE: HOV), Jackson Hewitt Tax Service (NYSE: JTX), Kellwood Company (NYSE: KWD), Korn Ferry Int'l (NYSE: KFY), Lantronix (NASDAQ: LTRX), MDS, Inc. (NYSE: MDZ), Methode Electronics (NASDAQ: METH), Movado Group (NYSE: MOV), National Semiconductor (NYSE: NSM), Nobility Homes (NASDAQ: NOBH), Plato Learning (NASDAQ: TUTR), Qualstar Corp. (NASDAQ: QBAK), Quiksilver (NYSE: ZQK), SAIC, Inc. (NYSE: SAI), Smith & Wesson (NASDAQ: SWHC), Solera Holdings (NYSE: SLH), The Cooper Companies (NYSE: COO), The Descartes Systems Group (NASDAQ: DSGX), UTI Worldwide (NASDAQ: UTIW), VeriFone Holdings (NYSE: PAY), Volt Information Sciences (NYSE: VOL) and a few more international operations believe it or not.

All us Wall Street nerd types will be up all night anticipating Friday's Employment Situation Report from the Labor Department. The consensus of economists anticipates an unemployment reading of 4.7%, and we agree, along with the Fed, that unemployment will gradually rise toward 5%. The tenth of a percentage point increase this month is expected now even among "Goldilocks" delusionaries. Nonfarm Payrolls are seen increasing some 100,000, though Barron's reported an expectation for a reading of 109,000. The weak ADP Report has likely led to many revisions lower. Average hourly earnings are seen increasing 0.3%, and we anticipate labor costs will not adjust in time to set up the accommodating inflation environment the Fed seeks in order to cut rates.

Wholesale Trade for July is also set for release Friday. Barron's reports the consensus view for a 0.4% increase in wholesale inventories, which is a component of the trade figure that measures both inventories and sales. Inventories rose 0.5% in June.

Friday ends the shortened week with earnings news from Aceto (NASDAQ: ACET), APT Satellite (NYSE: ATS), Hi-Tech Pharmacal (NASDAQ: HITK), Logility (NASDAQ: LGTY) and a few others.

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