The forecast for US private jobs gains is actually higher than expected, reducing the pressure put on Federal Reserve policy makers to add monetary stimulus this month. It means that they do not have to save up for a move later on this year. As reflected on the report done by Labor Department in Washington, private payrolls climbed 67000 in August after a revised 107000 increase in July that was more than initially estimated.
In addition, public opinion polls show jobs and the economy are top concerns among voters two months before November congressional elections in which the Democrats are at risk of losing their majorities in the House of Representatives and the Senate. Amongst those, a poll done by the USA Today/ Gallup Poll on August 30th found that Americans believe Republicans in Congress would do a better job on the economy that Democrats by 49 to 38 percent. More over, the Bloomberg News survey pointed a decrease of 54000 in employment for a second month as the government fired census workers. At the same time, the unemployment rate rose to 9.6 percent from 9.5 percent as more people joined the labor force. This maybe a good sight when people constantly seeking for jobs, however, they maybe just being active in order to stay being unemployed and taking advantage of unemployment benefits.
The report reduces the odds of a relapse into a recession while also reinforcing the view of Fed policy makers that the economy is recovering more slowly than they would like. This is totally contradicting to previous analysis just two days ago over the new about the chance of avoiding a second relapse of recession. The Federal Open Market Committee may still consider a second round of large-scale purchases of securities, a strategy known as quantitative easing, this year.
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