Tags: hatzius | jobs | number | recessionary

Goldman’s Hatzius: Jobs Data 'Not Recessionary'

By Bob Willis   |   Friday, 06 Jul 2012 02:36 PM

Weak job growth in June doesn’t point to a looming recession, Goldman Sachs chief U.S. economist Jan Hatzius told CNBC.

“It’s not a recessionary data point, but it is a data point that is clearly showing the economy is growing at a below-trend pace,” Hatzius said on CNBC’s "Squawk on the Street."

"Over time it’s probably consistent with slight deterioration in the labor market.”

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

The U.S. economy created 80,000 jobs in June, up from 77,000 in May, and the unemployment rate held steady at 8.2 percent, the Labor Department reported. Unemployment has topped 8 percent since February 2009, the longest such stretch since monthly record-keeping began in 1948, Bloomberg News reported.

Hatzius said he was monitoring other indicators for signs the slowdown is intensifying.

“If we were to see further deterioration in the business surveys, like the ISM and similar indicators, it would definitely be a warning sign,” he said.

The Institute for Supply Management’s factory index fell to 49.7 in June, marking a contraction in the manufacturing industry for the first time in almost three years, the group reported earlier this week. ISM’s gauge of service industries, released Thursday, showed the slowest growth last month since January 2010, Bloomberg reported.

Risks to growth for the second half would include failure of Congress and the Obama administration to avert the so-called "fiscal cliff" of higher taxes and less spending set to take effect early next year, CNBC said.

Goldman is forecasting average growth of 2 percent in the second half and 1.5 percent in early 2013, CNBC reported. The economy grew 1.9 percent in the first quarter, down from 3 percent in the fourth quarter of 2011.

Further slowing in coming months may push the Federal Reserve to carry out further easing measures later in the year, Hatzius said.

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

With the presidential election four months away, June capped the worst quarter of private-sector job growth in more than two years, Bloomberg reported.

Republican presidential candidate Mitt Romney called the jobs report another "kick in the gut,” Bloomberg reported.

“The president’s policies have not gotten America working again, and the president is going to have to stand up and take responsibility for it,” Romney said in Wolfeboro, New Hampshire, where he’s vacationing, according to Bloomberg.

President Barack Obama, speaking in Poland, Ohio, called the addition of new jobs “a step in the right direction,” Bloomberg reported.

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