Today's economic data

Employment costs up an acceptable 0.9 percent in the second quarter. Jobless claims up a bit, too, to 345,000.

The bulls will tell you this is consistent with monthly payroll growth above 200,000, and that the meager growth in labor costs will keep the Fed in check. They may be right.

But here's another way of looking at it, courtesy of Bob Brusca at Fact & Opinion Economics (with some editing and emphasis added by me):

"Benefit costs rose by 1.7%, down from the March quarter’s 2.6% surge, but higher than in each of the two previous quarters.

"The pattern is clear. Benefit costs pressures are increasing. They are up Yr/Yr by 7.3% in Q2 more than the 7% in Q1 and more than the 6.4% in 2003-Q4. This is pressuring firms to push costs back down onto workers or to economize on labor altogether.

"But labor, since it only receives the services and does not bear these costs, is beset by lower wage growth. Private wages and salaries rose by 2.5% Yr/Yr in Q2 compared with 2.6% in Q1 and 3.1% in 2003-Q4.

"This sets the stage for labor conflict, since workers see wages as pressured down and firms see cost pressures rising.

"What it means is that consumer spending is still underpowered by wage trends. While businesses are still under pressure to economize on labor. Job growth should remain weak."

Brusca thinks July's payroll number, due next Friday, will print between 100,000 and 150,000 -- a number far, far below what the Street expects.

Elsewhere on Wall Street, only Bank of America and Argus Research believe the number will be below 200,000. Thirteen other forecasters expect anywhere from 200,000 to 310,000, with a median forecast of 220,000.

I'm betting Brusca, BOA and Argus will be closer to right.