Jobless Data Mostly Positive Despite Fiscal Cliff Jitters

Jobless Data Mostly Positive Despite Fiscal Cliff JittersU.S. unemployment saw another slight improvement for December, with payrolls increasing by 155,000 workers and by an upwardly-revised 161,000 in November, beating Wall Street expectations.
The jobless rate held at 7.8 percent.
The December figure was consistent with the overall employment picture for 2012, during which an average of 153,000 new positions were recorded per month.
Overall, the jobless data was a positive, considering the pre-fiscal cliff jitters with both consumers and employers.
“I don’t think this is a big needle mover one way or the other,” Liz Ann Sonders, chief investment strategist at Charles Schwab, told CNBC. “Businesses are not having a problem from the employment perspective; they are from a confidence and (capital expenditure) perspective.”
The numbers won’t like change the posture of the Federal Reserve, which last month said interest rates will stay low as long as the unemployment rate remains above 6.5 percent, and projected inflation at 2.5 percent or below.
But the Fed is ready to respond if the economy improves beyond current expectations.
According to just-released minutes from the Federal Open Market Committee’s Dec. 11-12 gathering, Fed officials could end their $85 billion monthly bond purchases sometime in 2013.
The earliest ending to the program would likely come by mid-year. The latest round of “quantitative easing” was initiated to further spur growth and reduce unemployment. Some Fed policy makers opt for a year-end resolution.

Leave a Reply

Your email address will not be published. Required fields are marked *