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Is the Hiring Spree Over?

Posted By Barry Ritholtz On July 4, 2004 @ 6:37 am In Finance | Comments Disabled

WSJ.bmp [1]

And now, for our latest installment of: “Surprise the Economists!” [2]

By this point, it comes as no surprise that economists were way off on their monthly estimate for job growth. The June report showed employers added only 112,000 jobs to their payrolls last month, less than half the 250,000 economists had been expecting. Beyond the seeming randomness of the payroll numbers, what does the report mean for the labor market’s recovery? for interest rates? Here’s what some economists had to say about the report and its implications for the economy:

The June payroll gain “looks bad but there are no grounds for thinking it marks a reversal of the improving trend in the labor market. The softness partly reflects seasonals … partly an inexplicably small estimate for job creation … and partly the impact of higher oil prices.”
– Ian Shepherdson, chief U.S. economist, High Frequency Economics

* * *
“The job report was disappointing, but early in a labor-market recovery the increases are frequently quite variable. … The details of the June payroll report provides some reason to suspect the gains will improve going forward. Manufacturing employment declined, but every other report pointed to a rise.”
– Joel L. Naroff, chief economist, Naroff Economic Advisors

* * *
“A re-acceleration [in job growth] will be necessary if the economic expansion to successfully make the transition from being stimulus-led to being self-sustaining.”
– Steven Wood, chief economist, Insight Economics

* * *
“Volatility is a fact of life for the jobs report … We would focus on the persistence of the employment gains in both the establishment and household survey over the last three months. Both of these surveys show average employment gains of well above 200,000 per month in the second quarter.”
– John Ryding, chief market economist, Bear Stearns

* * *
“Softer employment growth and a smaller wage gain takes pressure off the [Federal Reserve] and reinforces a gradual path. We look for a 25 bp [quarter percentage point] hike at the Aug 10 [Federal Open Market Committee] meeting, but the Fed should be able to pause at one or more meetings before year end.”
– Stephen Gallagher, chief U.S. economist, SG Corporate & Investment Banking

* * *
“[T]his report squares with other recent indicators showing the economy is entering the second half with a bit less momentum though it still appears to be growing at a healthy clip. Because these data discredit the notion that the economy is suddenly overheating, they argue against the FOMC accelerating the pace of tightening.”
– David H. Resler, chief economist, Nomura Securities International

* * *
“[T]he stakes for July [jobs] data are now raised, and another disappointing report at that time would be cause for concern. Our own economic forecast assumes a sustainable trend of job creation of roughly 200K per month.”
– Joshua Shapiro, chief U.S. economist, MFR Inc.

What the June Jobs Report Means For the Economy, Interest Rates [3]
July 2, 2004 10:06 a.m.


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/07/is-the-hiring-spree-over/

URLs in this post:

[1] Image: http://online.wsj.com/article/0,,SB108091670125772831,00.html

[2] “Surprise the Economists!”: http://bigpicture.typepad.com/comments/2004/01/lets_play_surpr.html

[3] What the June Jobs Report Means For the Economy, Interest Rates: http://online.wsj.com/article/0,,SB108877471324854084,00.html

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