Many were expecting good news out of the Labor Department when it released the nonfarm payroll report for July. Unfortunately, this wasn't the case -- and the morning has taken a decidedly bearish tone.

According to the Labor Department, 131,000 jobs were lost during the month. The drop was attributed to the fact that 143,000 Census-related jobs were cut. Analysts expected overall employment to absorb the number of temporary jobs cut and show a drop of 65,000. When revising payrolls for May and June the picture turned even bleaker. The Labor Department revised the reading for those two months lower by 97,000, meaning fewer jobs than originally thought were created.

Investors and economists received a rather nasty surprise this morning when the Labor Department released its weekly data on initial claims for jobless benefits. According to the Labor Department, new claims for unemployment insurance rose by 19,000 last week to a seasonally adjusted 479,000.

The government did note that some of the surprise increase (a small decrease was expected) may be attributed to difficulties the government has in adjusting for seasonal factors. The four-week average of initial claims increased by 5,250 to 452,250.

According to the ADP employment payroll report released Wednesday morning, private-sector employment in the United States increased by 42,000. This data is a precursor to Friday's nonfarm payroll report, which is expected to show a decline of 60,000. July's increase was the sixth straight increase.

With experts predicting a drop of 60,000 jobs, I have one major concern. According to the article, analysts are expecting an increase of 96,000 jobs in the private sector. But the private sector (while it did report an increase) reported far fewer than 96,000 added jobs.

This morning's nonfarm payroll report was a good news/bad news sort of situation. The good news? The nation added 431,000 jobs last month. The bad news? Of those jobs, 411,000 were added thanks to the Census, meaning they were temporary workers.

In reality, payrolls advanced by 20,000 during May (taking the temporary jobs out of the equation), a rather disappointing number (and far short of the expected increase of 540,000).

Just when it seemed it was going so well, the ADP employment report demonstrated this morning that we have perhaps allowed our hopes to get too high. Expectations called for a gain of 40,000 jobs when the March ADP data was released, that was not the case. Rather than the gain, we were treated to the rather sour surprise of a drop of 23,000 jobs. In reaction to this news, the Dow Jones Industrial Average dropped more than 40 points lower in the first hour of trading.

That said, this may just be a temporary glitch in the jobs picture (I stress the term temporary). The ADP does not take government jobs into account, nor does it effectively "capture changes in the weather." Experts note that a surge in employees thanks to the 2010 Census should help the March payroll data. For this reason, the nonfarm payroll data released on Friday is expected to reflect a gain of 189,000 jobs.

Well, this was a nice surprise ... the unemployment rate fell to 9.7% in January from 10% in December, according to the Labor Department. This is good news, as expectations were for the unemployment rate to hold at 10% -- so some people are finding some jobs somewhere.

That said, the number of nonfarm payrolls dropped by 20,000 while expectations called for a gain of 25,000. With stock futures limiting some of their early morning losses, it looks as if investors and analysts are holding on to the unemployment rate news rather than the news that more jobs were lost than expected.

Last week, the number of people filing initial claims for state unemployment dropped by 20,000. As a result, benefits dropped to a seasonally adjusted 512,000. This drop in filings was the first in the past two weeks, and it is the lowest level of initial claims seen since early January.

That said, initial jobless claims have come in atop 500,000 for the past 51 weeks. In addition, the four-week average of claims dropped 3,000 to 523,700. This total is the lowest since the beginning of the year. Expectations called for initial jobless claims to drop to 520,000 last week, so it may be time to sound the rally bell.

It would have been nice if the jobs report this morning was simple, containing only surprises to the upside. But of course, the jobs market continued to show weakness as the August nonfarm report showed. The unemployment rate rose from 9.4% in July to 9.7% last month, the highest since June 1983. Meanwhile, employers cut a net total of 216,000 nonfarm jobs.

The unemployment rate was above economists' expectations of 9.5%, but the payroll decline below their projections for a cut of 225,000 jobs. For now, stock futures are still higher, indicating markets could at least start the session on a positive note.

247,000 US jobs were lost in July, far less than the 320,000 that were expected. The unemployment rate eased slightly to 9.4% from 9.5% in June. And there was more good news -- 43,000 fewer jobs were lost in May and June than previously reported.

The Labor Department reported that this was the first time since April 2008 that the jobless rate has fallen. Official numbers show that 6.7 million jobs were lost since the start of the recession.