The U.S. economy added 169,000 jobs last month, according to government data released Friday morning, as the grinding recovery continues to disappoint.
The Labor Department’s monthly estimate of hiring was weaker than many analysts had expected and offered little clarity about the direction of the economy. Although the unemployment rate dipped slightly to 7.3 percent, the drop was the result of people leaving the work force. The government also lowered its estimate of the number of jobs created in June and July by 74,000.
I don’t like this jobs report,” said Jared Bernstein, senior fellow at the Center for Budget and Policy Priorities. “I have a hard time seeing a labor market improving at the pace we need.”
The lackluster report likely will be a critical consideration as officials at the Federal Reserve meet later this month to decide whether to begin scaling back the amount of stimulus it has been pumping into the economy. The central bank has been buying $85 billion in Treasurys and mortgage-backed securities each month to help push down long-term interest rates and spur demand among consumers and businesses. The Fed has said it will not pull back until the recovery strengthens, including the job market.
But there is much debate within the central bank over when that will happen. The first reduction in purchases was expected to come this year — perhaps as soon as this month. Speaking in South Carolina Friday before the jobs report was released, Chicago Fed President Charles Evans said the central bank’s decision will depend on the incoming economic data, which he acknowledged have been murky.
“For me, to start the wind-down, it will be best to have confidence that the incoming data show that economic growth gained traction during the third quarter of this year and that the transitory factors that we think have held down inflation really do turn out to be transitory,” he said.
Meanwhile, Washington remains a wild card for the economy. Congress must agree on at least a short-term spending plan by October or risk shutting down the federal government. In addition, the nation may not be able to pay all of its bills unless lawmakers agree to raise the debt ceiling before a mid-October deadline. House Speaker John A. Boehner (R-Ohio) has promised a “whale of a fight” and is likely to seek changes to President Obama’s signature health-care law in exchange for cooperation on the debt limit.
“It’s hard to judge it in a normal way because the threat is irrational,” said Robert Shapiro, a former senior Democratic economic adviser who heads the advisory firm Sonecon. “It doesn’t really advance the self-interest of anyone.”
Overshadowing those debates is the possibility of a U.S. attack on Syria and tumult in the Middle East. Crude oil prices jumped to an 18-month high in late August, though they have moderated since. The price of West Texas Intermediate crude oil for customers needing delivery in October rose about 1 percent Thursday, to $108.35 a barrel.
At the very least, the discussion of U.S. involvement in Syria may delay the fight over — and eventual resolution of — the country’s fiscal problems.
http://www.washingtonpost.com/busin...6ef-11e3-a2ec-b47e45e6f8ef_story.html?hpid=z1
The Labor Department’s monthly estimate of hiring was weaker than many analysts had expected and offered little clarity about the direction of the economy. Although the unemployment rate dipped slightly to 7.3 percent, the drop was the result of people leaving the work force. The government also lowered its estimate of the number of jobs created in June and July by 74,000.
I don’t like this jobs report,” said Jared Bernstein, senior fellow at the Center for Budget and Policy Priorities. “I have a hard time seeing a labor market improving at the pace we need.”
The lackluster report likely will be a critical consideration as officials at the Federal Reserve meet later this month to decide whether to begin scaling back the amount of stimulus it has been pumping into the economy. The central bank has been buying $85 billion in Treasurys and mortgage-backed securities each month to help push down long-term interest rates and spur demand among consumers and businesses. The Fed has said it will not pull back until the recovery strengthens, including the job market.
But there is much debate within the central bank over when that will happen. The first reduction in purchases was expected to come this year — perhaps as soon as this month. Speaking in South Carolina Friday before the jobs report was released, Chicago Fed President Charles Evans said the central bank’s decision will depend on the incoming economic data, which he acknowledged have been murky.
“For me, to start the wind-down, it will be best to have confidence that the incoming data show that economic growth gained traction during the third quarter of this year and that the transitory factors that we think have held down inflation really do turn out to be transitory,” he said.
Meanwhile, Washington remains a wild card for the economy. Congress must agree on at least a short-term spending plan by October or risk shutting down the federal government. In addition, the nation may not be able to pay all of its bills unless lawmakers agree to raise the debt ceiling before a mid-October deadline. House Speaker John A. Boehner (R-Ohio) has promised a “whale of a fight” and is likely to seek changes to President Obama’s signature health-care law in exchange for cooperation on the debt limit.
“It’s hard to judge it in a normal way because the threat is irrational,” said Robert Shapiro, a former senior Democratic economic adviser who heads the advisory firm Sonecon. “It doesn’t really advance the self-interest of anyone.”
Overshadowing those debates is the possibility of a U.S. attack on Syria and tumult in the Middle East. Crude oil prices jumped to an 18-month high in late August, though they have moderated since. The price of West Texas Intermediate crude oil for customers needing delivery in October rose about 1 percent Thursday, to $108.35 a barrel.
At the very least, the discussion of U.S. involvement in Syria may delay the fight over — and eventual resolution of — the country’s fiscal problems.
http://www.washingtonpost.com/busin...6ef-11e3-a2ec-b47e45e6f8ef_story.html?hpid=z1
