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Payden & Rygel Senior Economist Jeff Cleveland and RJO Futures Senior Commodities Broker Phillip Streible on the outlook for the economy and job m...
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Let us talk about jobs in the overall economy because that's what we're talking about your.
Good news bad news there was there was something for everybody in this but it still shows that the economy is sluggish no matter how you cut it.
It is a sluggish economy we have never.
I think in the in the past four years since the recession we've never really grown over 3% it's always been below 3% we need to grow at four point 5% right.
Now yeah.
We do I'd love to see that -- This is really more the same but I look at the twelve month average for nonfarm payroll growth it's it's plus 162162000.
Today's number 171000.
So -- statistically.
Indistinguishable from the trend saw -- the all the clamor for this up point two and in a significant acceleration.
In job growth -- -- more the -- which is which is slow growth.
By the way does this mean that that we are gonna see another QE because god -- are already buying a lot of bonds of Federal Reserve.
Of course today's -- gold numbers seem to indicate maybe they won't be as aggressive and by.
I think the market like the number came in way above consensus so the market took down gold on the yet on the idea that maybe there won't be -- Q before.
David -- -- get into the here they don't added treasury purchases on to the current QE3 which is buy mortgages but I think -- -- so closely tied.
Their policy this QE3 to improvement in the labor market.
And in the last couple days using comments from from fed speakers that the unemployment rate should be closer to -- maybe 7%.
Kraft from where we aren't outdated and he did there.
In that the current pace that's going to be another maybe twelve to eighteen months of.
A bond buying.
-- in -- been -- for the stock market -- we're looking at a graphic here of how quantitative easing has boosted the -- tried at least to force people off the sidelines and put their money in stocks which.
Had better returns than anything -- interest rates plan but perhaps the question really is at this point what level do we need to see the unemployment rate at.
Before we would start to see the Fed begin to tighten rates is it the 7% or does it have to be a little lower than -- I think it's somewhere between six and 7% 86 and six point 8%.
And our opinion and that's just based on looking at there -- projections that they release top four times a year and watching fed speakers looking into their their speeches and and how they sort of think about this problem.
I think the real issue Elizabeth the unemployment rate is as you know there's so many moving parts.
The fact that it ticked up this month is not actually -- bad thing.
In the sense that more people came back into the labor force.
From previous months they were discouraged but for a job this month they were probably out there looking for one and that's actually a good sign.
And looking too closely at that unemployment rates and it sends the wrong signal.
-- Phil you're still Westfield street -- go back to CME for -- You know what Liz says is actually actually true the kiwis have been great for the market.
But the Federal Reserve is not supposed to be based on the success of the market it has two factors that are supposed to move -- want to see unemployment rate.
Which hasn't moved.
That much with the exception of the past couple of months and two.
Maintaining the value of the dollar -- his failed I would submit in both of its objectives its objective is not to raise the stock market.
But to lower unemployment and of course to maintain the value of the currency so.
Where is it succeeding according to its own standards.
Well it and no that's that's really tough to -- I mean.
I I could see the direct correlation between the QE coming out and its stock market moving -- I've never want to see that but the reality is is that businesses are continuing to hold more and more cash and besides.
Third not expanding their concerned about you know who's gonna come and what kind of policies are gonna be in place.
And they want to keep as much cash is possible because we're concerned that there may be some.
Economic downturn or we might slide back -- recessions self cutting the QE is good for the market right now.
But who it's really helping you know that's -- that's -- right Phillips -- thank you very much and gently look good to see you both guys have a good we.
