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发帖数: 10335 | 1 Why Friday's Jobs Report Is Expected to Be So Gloomy
September probably offered little relief in the nation's vexing unemployment
problem, setting the stage for more Fed intervention that experts give only
dubious prospects for success.
Economists expect Friday's jobs numbers to be a wash-private payrolls likely
increased 75,000 but the government cut another 78,000 Census workers from
its payrolls.
When factoring in the other variables, that probably means zero jobs growth
and an unemployment rate inching up to 9.7 percent from 9.6 percent, mainly
because more unemployed people rejoined the search for work.
The reasons behind the poor jobs outlook are myriad, experts say: The tax
climate remains uncertain as November's election prospects hang in the
balance; the government is continuing to peel off Census workers; and while
double-dip recession fears are coming off the table, belief that the
recovery will be slow and painful is not.
"We're settling into what I would call this slow-growth mode that will be
with us until we have resolved some structural problems in our economy. How
long that is going to take nobody knows-it could be several quarters or
several years," says Bart van Ark, chief economist at the Conference Board.
"Everybody's just incredibly cautious because we are beginning to realize
this was one of the worst recessions and not just a cyclical thing."
That's hardly what was expected when the government began spending its $810
billion in stimulus funds that was supposed to drive the unemployment rate
down to about 8 percent by now.
What has happened instead has been a slog through very slow growth in which
GDP could rise as little as 1.5 percent in the third quarter, according to
some estimates.
"With a lot of the spending, it doesn't seem to be sticking here. It's going
somewhere else," says Doug Roberts, chief investment strategist for Channel
Capital Research in Shrewsbury, N.J. "In the near future, nothing seems to
be ready to radically reverse this."
Enter the Federal Reserve.
The US central bank is expected to announce some form of quantitative easing
-essentially the printing of money-as soon as its November meeting. A weak
jobs report Friday likely would give Chairman Ben Bernanke and the rest of
the Fed governors strong impetus to justify stepping in and taking other
measures to drive down interest rates.
"The message that the Fed has been sending is very clear and that is that
the status quo is unacceptable," says Zach Pandl, economist at Nomura
Securities in New York. "The Fed is very clear. It has a mandate for full
employment. We're not getting there fast enough and further monetary easing
looks necessary."
But doubts linger about whether the Fed will be able to spur the economy.
After all, the central bank's policies have yielded mixed success at best,
with a $2.5 trillion balance sheet expansion still leaving the economy with
near double-digit unemployment and consumer and business confidence weak.
"I don't know what the purpose of QE would be," says Kurt Karl, chief US
economist for Swiss Re in New York. "They'll have to reiterate that they'll
put in QE2 if economic weakness warrants it. So far in my reading of the
economy, it doesn't warrant it.
"Therein lies the rub: If they think the economy needs QE2 it's not a good
sign to the market or the economy. So they have a delicate balance to strike
there."
Some analysts believe that until the political situation in Washington gets
settled in November's midterm elections, businesses will be loathe to make
any commitments.
"As far as corporate America hiring again it's basically dependent on what
happens in Washington," says Peter Cardillo, chief economist at Avalon
Partners in New York. "If the opposition party should gain enough seats to
perhaps reverse the present administration's policies somewhat, then I think
you'll see a big pickup in employment."
Instilling consumer confidence is the key, says Cardillo, who actually is
more optimistic than consensus as he sees net job gains of about 25,000 and
the jobless rate holding steady at 9.6 percent.
"The problem is you have consumers who are still very wary," he says. "
Unless you change the mood of the consumer, spending is not going to fall of
a cliff. But by the same token, it's not going to be robust anytime soon."
And without that consumer generating final demand, there's little hope
businesses will feel confident enough to start hiring.
"The Fed has little tools in terms of giving the economy a new pulse," says
van Ark of the Conference Board. "It can avoid things getting worse. In the
meantime we are looking at huge issues that need to be resolved. For that we
need growth." |
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