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Jobs Report to Keep QE3 Hopes Alive

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    RBS Senior Economist Michelle Girard weighs in on the April jobs report.

  • Duration 3:40
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This transcript is automatically generated

Certainly -- locks.

Well the April jobs report was a huge disappointment only 1151000.

Payrolls -- its.

And with the labor force participation.

Rate now -- thirty year low my next guest feels this'll keep hopes alive for QE3.

Michelle -- RBS senior economist she joins us Michelle great to see you -- C is so you wrote this morning your research Paper the momentum of the labor market seeing around the turn of the year is fading why is that happening.

Well you know I a couple of things they actually think it's more about unsustainable strength around the turn of the year.

Maybe it was the whether -- maybe it was just out of firms needing to.

Catch up a bit on hiring out of that you know what I -- -- -- the summer of last year but we're worried about a double dip in the budget crisis I think firms that held off.

And it may have found themselves a little bit behind the -- and so there was a push to hire as he moved into the end of the air next carry Florida -- whatever it is we're growing.

Jobs too fast -- the economy is only growing two and a half percent and I think what we learned this morning.

Is that indeed the economy is growing probably only two and a half percent right and the -- cases settling back down to deal with that beginning to your original so you're saying -- -- still only getting a very weak what 20250000.

Jobs data each month.

And that was too many jobs this economy and that's so depressing well and you know at -- 55000.

Roughly and private payrolls as what we average from December through February.

And the truth is is that that's -- it's consistent with an economy that's growing better than trend that's going better than two and a half percent more like an -- that's going 3% plus self.

One of the two things had to happen in the economy is actually much stronger than we and we -- -- RLs the employment numbers are probably not gonna be sustained at that pace tonight as an -- -- -- a big -- this morning unfortunately.

Is that the employment numbers have kind of settled back here a bit yeah.

-- level we've seen eyeball they don't get a self fulfilling prophecy now where.

Because there's all this concern about the lack of job growth people are gonna start reigning in the spending whether or not have jobs are not.

And it's it's gonna slow the economy further and -- is gonna continue to cap.

The potential for new job creation yet they make a good quit because you know I and I think we've seen that we've seen optimism feed on itself in the fall of last year -- job numbers got better than people -- confident confidence -- -- in people -- and it had got itself positively.

-- and and not you know what we see is lending in the data third -- We can get the reverse of that we saw that in the spring of last year -- in the spring of 2010 as well where as nervousness -- you know increase -- the negativity that concern kind of fed on itself today it's Italy and hope that won't happen but I have to say.

In addition all that we're dealing -- let's face it we've got a lot of uncertainty.

As we start to look ahead to at the year and that tax cuts expiring.

On the fiscal situation and I think that's another factor as we move in the second half of this that business isn't going to be very wary.

And I think all of -- gonna show more caution and we saw earlier this year in a the president says banking on the lower unemployment rate obviously is -- -- election you're now.

Do you think the public Smart enough Michelle to realize that the only reason unemployment improving -- people -- just giving up and dropping out.

Well.

Bit above the mean it according household survey where we get that the unemployment rate fund come from.

We added about two and a half million jobs in the last you know at under the last nine months and -- On -- it isn't just that the labor force is -- people make that point I think it's a little bit of a stretch its.

It's the issue but it's not the whole story we've seen a better labor market the problem is.

Eight point 1% is still too high and I don't think anyone looks at that feels very good about the economy right now -- to leave it there but you summed it up right that -- for himself.

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