The U.S. lost jobs in July. The S&P 500 hit another record anyway.

The July jobs report looked pretty bad at first glance. Payrolls fell by 23,000, versus expectations for an 80,000 gain, and June was revised down to just 20,000. Yet unemployment fell to 4.1%, largely because the labor force got smaller. And the S&P 500 still finished at a record high. I can understand weaker jobs pushing rate expectations down. What feels strange is that the market seems perfectly happy with weaker employment as long as earnings haven’t cracked yet. Maybe that window can stay open for a while. I’m just not sure how much weaker the labor data can get before investors start reading it as weakness instead of relief.