Private employers in the US economy added 67,000 workers during the month of August. Hurrah! This is good news, right?

Um, well – the world’s biggest economy overall lost 54,000 jobs last month, the majority of which came from an end to temporary hiring undertaken by the government to conduct a census. Cash for clunkers, counters for censuses…all pretty much the same thing really.

The bottom line is that the unemployment rate rose to 9.6%. But on the basis of this ‘good’ news, the US, French and British stock exchanges rose a whole 1%. So yet again, these highly-paid ‘professionals’ are taken in by an obvious bit of window-dressing.

What most of the media missed, however, is that the underlying inflation rate in America is pushing 4%. Next week, Obama says, he will announce QE2 in detail. Thus there are now three things in the way of economic stimulation: inflationary pressures, Republican opposition, and the Chinese.

It’s very clear what the President has to do….but he won’t. He’ll fudge it, trying to please everyone at once. Barack Obama has shown himself to be a reticent and indecisive leader; it would be good to see him, just this once, say ‘to hell with the polls and the media’ and write a page for himself in history. This seems unlikely, as already the US media are printing leaks about a diluted mixture of tax cuts and bits and pieces of QE.

Meanwhile, the Slog story about the White House team’s ‘iceberg’ idea for hidden QE (so as not to alarm China and the credit markets) still stands.