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Jason Pride, Glenmede director of Investment Strategy, and Ellen Zentner, Nomura senior U.S. economist, weigh in on the markets, economy and today’s...
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Why does it make the president happy and you are unhappy -- -- typically for US households when they hear the unemployment rate is declining that's good news right.
But economists quickly look and say why is it finds a -- for the right reasons and in today's report that declined eight point 1% was not for the right reason.
As you said it's because people gave up looking for work.
We saw the labor force participation rate decline across.
All age groups but most.
In that age range of 45 to 54.
Those are the prime working years if if you're out of a job from 45 fits your first of all you probably not gonna.
Get one when your in your mid -- if -- lost one for so many years right absolutely the odds of you finding work again are greatly diminish this is something that chairman Bernanke has been concerned about.
Because he says that structural problems in the labor market.
Can not be addressed by the Fed with a further easing of monetary policy are.
Well Jason what do you think about fed action do you think the Fed is gonna react.
By trying another round of part of some of the members of the Fed have said that there is still room to print more money what do you think's gonna happen it.
But I think there eventually perhaps going to have to react the reason being is that we are -- a slower period for for the economy.
You know I think it's kinda hidden I think people are starting to pick up from today's employment report.
Even have a -- really wasn't as big and this -- as many are portraying it is evidence that this is a slower growing economy than we think.
Which means that the Fed is going to have to remain on bad.
On that judge -- -- between do we -- doing not friend -- time being.
Hopefully looking towards to -- -- -- a better economy that they don't have to react but more likely than not eventually getting something that's a little bit softer having to comment.
Alright final I have not forgot about you believe in fact I wanna go to -- right now talk about oil little -- this was a tremendous drop 4% it's now down about three point 8% but still a very big drop is it gonna continue.
Yes because oil prices on.
They'll hide their economy is -- demand for oil and continue to decline there's no reason for our prices to be if -- dollar to become remind your hundred.
-- bottle did the unemployment figures just kill off any bulls in the oil market arsenal here.
Absolutely and we have seen this trend for the last few weeks.
Obviously lead -- bad.
Job -- -- just push it even more.
Well look I haven't talked Allen about the Fed do you think that they use the action and unemployment figures is gonna cause the Fed to react with a more money for -- At this point we don't think this is weak enough.
Even the doves on the Fed has started to shift toward this idea of it would take a significant weakening in the US outlook for them to move and.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- From a -- Charles Evans of the Chicago fed says there is.
Quote tremendous room for more accommodation for more money pretty whereas a walk -- at the Atlanta fed president -- he's more skeptical.
He said there's only so much we can do to stimulate -- it depends on who you listen to well.
Well it certainly doesn't you've highlighted the bluebird than that Bloomberg talks on the hunt India FOMC.
And so what we point out though is that if you look at the core members the Bernanke like minded members on the apple and see.
They've moved away even the chairman himself from saying.
Current conditions are weak and we need to provide more to saying.
We are ready and prepared to pull the trigger but the economic outlook has to worsen from here in order -- to do and this one report is not gonna do that for them.
Well why don't just do for the sake of argument suppose that there is another round of money printing will that bring oil prices back up.
I'm not sure.
If the economy doesn't want to respond if demand does not increase and I don't see any reason why -- -- should be increased.
Because efficiency continue to bring demand down.
Oil prices are inflated that I do things that -- -- Sierra.
And nausea or unfilled harmless around doesn't see oil prices that -- is I don't think that could impact on the economy would be out.
All right Jason pride for all his talk about the out of what we had to get -- you think there are actually bigger things.
Then unemployment -- and -- economy tell us what they are.
Well look I think we've been seeing as many of the leading economic indicators the regional surveys.
Within the US the regional surveys -- purchasing manager index is within Europe.
Have been weakening so we've been seeing that early signs that that a lot of business managers start to pull back.
That -- as opposed to the economy a gradual -- way in three to four months afterwards.
That continues we could see more weakness right now -- now wait and see very good to see that actual default through that occurs within the economy.
Well Alan you see no bigger challenge to the got to be -- the jobs number right.
And jobs are the root of all evil we don't have enough of them in the ones we are creating are coming at such a low wage rate than inflation adjusted wages haven't grown -- over a year.
But I would agree adjacent -- certainty I think is only going to grow with we get closer to the election.
And that uncertainty in the political uncertainty that's coming at the end of the year that's gonna hit businesses with what is my tax environment going to be like there's.
A lot of uncertainty that I think is only gonna grow as we get further into the year old Tim let us bring it back.
