Labor day is a time for workers to take a break from their travails and enjoy some of the fruits of what they have produced. For the investor class, the state of the labor market is also a matter of concern over this holiday; not so much because of how workers are faring but, to be brutally honest, because of how it affects the capital markets.

The monthly compendium of employment data is always the most highly anticipated and scrutinized batch of numbers produced by the government statistics mills, but it has taken on a greater status than ever before. Credit, or blame, the Federal Reserve officials who have hinted broadly that further strong gains in the jobs market would let them implement the long-promised increase in their interest-rate targets.

But the August employment report, released on Friday just before Wall Street’s exodus for the long holiday weekend, gave little sign of significant improvement in workers’ lots and, in turn, all but quashed the chance that there would be a rate hike at the Sept. 20-21 meeting of the Federal Open Market Committee.

To use a technical term, the jobs numbers were meh. Nonfarm payrolls rose by 151,000, shy of the 180,000 forecast by economists, a relatively trivial miss, while the unemployment rate held unchanged at 4.9%, with minimal net revisions of previous months’ numbers. Beyond the headlines, however, were some devilish details that belied signs of stability.

In particular, during August, workers saw their earnings barely budge, while their hours were cut, leaving them less in their aggregate pay packets. Hiring in the private sector was punk, with much of it accounted for by notorious phantom jobs from business start-ups presumed by government number crunchers. A rise in government payrolls was also largely the product of statisticians’ seasonal adjustments.

Average hourly earnings edged up 0.1% last month, which might not have kept up with inflation. Even worse, observes David Rosenberg, chief economist and strategist at Gluskin Sheff, was a cut in the workweek, to 34.3 hours from 34.4. Workers’ paradise? Hardly. As he explains, that’s equivalent to slashing 300,000 from payrolls.

The main area of strength over the past two months has been government jobs, according to Morgan Stanley economist Ted Wieseman. With 47,000 local teaching positions included, they were up 75,000 in July and August. Without seasonal adjustment, government payrolls were down 868,000 in those two months, he points out, and the gains probably represent the difficulty in adjusting for summer school breaks. Given the timing of Labor Day this year, more kids than usual started classes in August, confounding the statisticians. What the seasonals giveth in July and August they likely will taketh away in subsequent months.

More to the point, Rosenberg reckons that the August employment data imply dips of 0.2% for personal income and industrial production. From the standpoint of working men and women, the combined effects of minimal earnings growth and shorter hours put aggregate change in year-over-year employment at negative 1.5%—the worst showing since December 2013.

That reflects the gains that have gone to lower-paying jobs, according to Steve Blitz, a sharp-eyed economist at an outfit called M Science. Excluding jobs in health care, retailing, and restaurants, along with mining (where employment has been decimated by the oil bust), payroll increases in higher-paying sectors have averaged 73,000 in the past six months and 93,000 in the past 12. That represents a slowdown from the beginning of 2015, when the six-month moving average was 150,000 and the 12-month was 97,000.

One possible explanation for the recent slowing in job gains and pay is that employers, feeling the squeeze from rising costs and waning revenues, have been trimming expenses wherever they can. And that includes cutting hours and holding payrolls in check.

Revised data for the second quarter released last week show unit-labor costs—a more comprehensive measure of labor expense—rising at a 4.3% annual clip, up from a preliminary estimate of 2%. The likely future effect, according to Joshua Shapiro, chief U.S. economist at MFR, may be the opposite of what has been happening. Businesses may try to economize on less-skilled workers in order to hang on to more-skilled ones and protect profit margins, resulting in lower overall payroll growth.

Shapiro also points out that the so-called birth-death adjustment (which corrects for presumed net business formations) totaled 106,000, before seasonal adjustment, versus unadjusted private payroll gains of only 33,000. While that’s not precisely comparable to seasonally adjusted numbers, it suggests a big influence on the adjusted data.

These micro examples belie the macro picture of an economy at full employment because of a sub-5% headline jobless rate. The broader, so-called underemployment figure (dubbed U6 by the Bureau of Labor Statistics, which includes part-time workers who want full-time gigs, plus people “marginally attached” to the labor force) held steady at 9.7% in August.

So-called hawks arguing for the Fed to raise interest rates contend that the slowing of job growth indicates full employment; the pool of available workers is being absorbed, resulting in fewer hires. That notion is contradicted by tepid wage growth, according to Citi economists Andrew Hollenhorst and Andrew Labelle.

Economics 101 would suggest that if there were full employment, businesses would be bidding for workers to have enough labor to satisfy demand for their products. Anecdotal evidence suggests that rising costs, in part owing to government initiatives such as hikes in the minimum wage and increasing benefits expenses, are inducing businesses to cut elsewhere.

According to Challenger Gray & Christmas, computer firms have announced more than 55,000 job cuts this year, with Cisco Systems (ticker: CSCO) last month announcing 5,500 layoffs. Elsewhere, another Dow Jones industrials component, Wal-Mart Stores (WMT), said it would trim 7,000 back-office jobs, while it boosted store employee wages.

Put together, these bits and pieces from the jobs front suggest that the long-shot bet that the Fed will raise interest rates this month is off.

According to Bloomberg, federal-funds futures put a 32% probability of a quarter-point rise in the fed-funds target, from 0.25-0.5% currently, at the September FOMC meeting. The probability for a move at the Dec. 13-14 confab is 60%, better than even money but no sure thing. All because the economy’s progress is, shall we say, labored.

WHILE THE FED and its fellow central banks have fallen short in producing robust recoveries for workers, they have provided the cheap capital to fund the plans and dreams of capitalists. Perhaps too generously, in the case of the latter.

Both the New York Times and Bloomberg last week published features on the boom in residential building in the Big Apple, both of which featured the G word—glut. The Times’ page-one piece related that the Brooklyn rental market is “saturated.” What once was known as the Borough of Churches has become overgrown with high-rises for hipsters (as well as normal humans). And across the river in the City (aka Manhattan, as old-time Brooklynites call it), developers of hyper-luxury condos are being forced to offer multimillion-dollar price cuts to lure buyers for the plethora of flats for plutocrats coming on the market.

To some extent, the slowing demand reflects foreign factors, notably the diminished circumstances and circumscribed abilities to move money onto U.S. shores by the well heeled abroad. But the surfeit of supply surely has been stoked by cheap money created by central banks around the globe, which has been used by developers to erect these superfluous structures.

The dough has also bankrolled all manner of what economists of the Austrian ilk dub malinvestments—boondoggles that wouldn’t get funded in the absence of cheap money. When times get tough, prudent capital gets going—elsewhere—just when the malinvestments need further cash to replenish what they’ve burned.

The latest example is Tesla Motors (TSLA), which reported last week that it faces a cash squeeze and needs to raise additional capital to support the merger with another of founder Elon Musk’s companies, SolarCity (SCTY). The highly accommodating capital markets had been wide open to Tesla, providing it with extraordinarily cheap financing for its “gigafactory” for batteries, through notes with tiny interest coupons convertible into its then-highflying stock, as this column noted back in early 2014.

That was then. Now, Standard & Poor’s has added Tesla to its list of “weakest link” corporate credits. Those so dubbed sport credit ratings of single-B-minus or worse and a negative credit outlook. S&P considers them to be default candidates.

This tally of weakest links increased to 251 companies in August, from 245 in June. That’s the most since 264 in October 2009, during the financial crisis. Oil and gas outfits were the largest group, accounting for 25% of the total, followed by financial institutions with 14%.

The trailing 12-month default rate for the weakest links during the last default cycle was 10 times that of speculative-grade credits overall, S&P noted in a research note.

Free money from central banks provides the stakes for gamblers to follow their dreams. Some of it goes for reckless real estate development; some of it goes for blindingly brilliant electric automobiles. When financial conditions turn, however, both suffer.