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While today's jobs report may not be a game changer for the Fed's upcoming policy decision it did cause our next guest is significantly cut.
He's year and unemployment rate forecast joining us now.
-- as deputy chief UB IUS economist at UBS good to have -- here.
And you've cut your forecast I'm gonna read this year 2013 you expect unemployment to be 7% 2014.
Six point 3%.
Why do you think we will fall it seems pretty quickly to hit those numbers.
Well I think if if you look at.
If you look at the way jobs have been growing -- -- -- about 200000 a month for the last five months.
That's really right on top over the -- said they wanted them to be.
And if you assume that the labor force doesn't grow which is our basic assumption and really what we're looking for was any sort of change -- that today any sort of -- -- -- it -- kind of -- -- -- lowering these numbers.
And we didn't get it we got a healthy report.
We got it -- million uptick in the unemployment rate for those largely caused by students coming out of school looking for jobs.
And so you know today's report was good it was nice solid report.
And so in that context were able to -- go ahead and and and just you know just our numbers to account for the fact it doesn't seem like the labor force is expanding at this point.
-- so from -- investing standpoint a lot of people look at your numbers and if they agree with you that's a signal -- Federal Reserve pulls back six point 5% is the magic number when unemployment at six point 5%.
They had said they need to be out at the Q we business accurate.
A lot -- and etc.
have to hike rates so I -- -- is probably a year in advance of that.
And since we have them hitting it about six and a half by the end it's quite fourteen that means -- beginning at 4014 when it got to caper which.
Obviously there -- -- markets looking for slightly earlier -- we think low inflation and concerns about the sequester gonna keep the Fed on hold for a little longer than people suspect.
So forgive me and permit me to challenge you -- -- -- reaching the economists and as south of here actually said that we need to see a job creation number over 350000.
To get as close to the kinds of unemployment numbers you're talking about why is he wrong or -- are you wrong here.
As an adjusted for the factor.
Are made the adjustment for the fact that demographics are working against -- participation rate has nothing to do with the economy at this point has to do with the fact that.
Baby boomers turn 65 starting point thirteen.
And our 2010 and and going forward and we're beginning to see those trends develop.
If every age group kept working with the same attachment to labor force that they had.
Over the next two years the labor force for just fishery would fall simply because the demographic factors occurring US economy.
So yeah that's -- it's about your question I know Peters pretty well respected economist and a professor so.
Maybe -- got to get away from her aggressions and move back towards out there were a little bit.
And so let's talk about another this -- seems to be.
Pretty simple metric to look at for those of us who had to repeat pre algebra.
The hours worked during the week actually ticked up slightly thirty -- was -- 34 point four to 34 point five that's an indication that companies need to start hiring incidents.
I tends to be you know and what -- what's interesting is that an accurate number so when you look at the individual.
Sectors within the economy what we find is that actually most of the work rates are above average.
It's just that we've shifted who's being hired where.
And so that -- that brings a number lower but if you look at the individual segments of -- economy most of -- -- very high work weeks relative to the roar.
And last question for you there was one thing that I thought was a little bit struggling that we -- the loss of our manufacturing jobs.
And the fact that housing construction we don't have that big an increase in construction jobs is that troubling you.
I it's not if you look at manufacturing -- aware of the weakness was was a lot of export oriented type areas capital equipment.
Iowa where this -- was -- a lot of consumer driven stuff so what we're seeing -- the impact of the global weakness.
But if you look at all the things US has going for housing the shell story the US consumer.
I think we're pretty good shape.
Right through -- thank you for joining us here on the Fox Business Network.
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