Tags: analysts | jobs | data | Americans

Analysts: Jobs Data May Lift Americans' Spirits—But Not Much

Friday, 03 August 2012 11:59 AM

The Labor Department's July employment numbers may help buck up Americans' generally dour view of the economy, experts say, but don't expect dancing in the streets.

Payroll jobs increased by 163,000, beating most forecasts.

“While the monthly gain is still relatively small by historical standards, it might help spark somewhat higher consumer optimism and spending,” said Kathy Bostjancic, director of macroeconomic analysis at the Conference Board, according to CNBC.

“I’d call this a soft 163,” said Steve Blitz, chief economist at investment research firm ITG Investment Research in New York, according to CNBC.

“If you want to take from this the notion that the economy is not heading to a recession or something more ominous, that’s fine. But if you want to take from this the idea that the economy is about to accelerate, I think that would be a big mistake,” he noted.

The unemployment rate rose to 8.3 percent from 8.2 percent in June, as some households lost jobs despite the increase in hiring. The jobless rate, which has stubbornly refused to break below 8 percent all year, means the Federal Reserve won’t rule out stimulating the economy, others added.

“Today’s report doesn’t take the pressure off of [the Fed] to do something to move the economy up from 2 percent growth,” said Blitz in separate interview with The New York Times.

“By the same token it also takes the gun away from their head that they have to do something very quickly.”

Under its mandate, the Fed must keep prices stable and employment rates at optimal levels.

Since the downturn several years ago, the Fed has rolled out a slew of stimulus measures to jolt the economy, including two rounds of asset purchases from banks, a monetary tool known as quantitative easing that weakens the dollar and sends stock prices rising.

Other experts agree the Fed remains poised to intervene, for better or worse.

“A rational investor would prefer a growing economy over additional stimulus,” said Sam Stovall, chief market strategist for S&P Capital IQ, according to USA Today.

“It’s like your mom telling you that if you don’t gain weight, she’ll start feeding you Twinkies,” Stovall said.

Meanwhile, the labor market, like the broader economy, is showing some signs of improvement but is still falling way short of a more lasting recovery.

“It’s a lot better than we’d been seeing in the last few months, but it’s still short of the kind of job growth we were seeing at the beginning of this year,” said Paul Ashworth, chief North American economist at Capital Economics, according to The Times.

“I think this is about as good as it’s going to get,” Ashworth added.

© 2020 Newsmax Finance. All rights reserved.

1Like our page
Friday, 03 August 2012 11:59 AM
Newsmax Media, Inc.
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved