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Sept. jobs report: Will Fed now act to boost economy?

By Neil Irwin
The September jobs report was decidedly mediocre, with sluggish growth on private payrolls, steep declines in public payrolls, and an unemployment rate that is treading water.

So what does it all mean for Federal Reserve policy?

The simple answer is that there is now every reason to expect the Fed to announce new steps to try to bolster the economy at its policy meeting early next month.

Fed policy moves are never a done deal until they are announced, and there are lots of open questions around the exact approach the Fed will use to ease monetary policy further (though it will involve purchasing massive quantities of bonds). But with unemployment stuck at high levels and inflation coming in below the levels the Fed aims for, the train would seem to be leaving the station on new easing.

"Over the past five months, the private sector looks to have settled into a trend of weak job creation," said J.P. Morgan Chase economist Michael Feroli. "if the mentality becomes entrenched that employment numbers like today's are the norm, then an attitude of permanent malaise could enter into economic behavior. This is an outcome we believe the Fed would find unacceptable. For that reason, we see today's employment report as only furthering the case for more asset purchase by the Fed."

The top two Fed officials will have opportunities to clarify this question next week. Janet Yellen is to deliver her first speech as the board's vice chairwoman Monday, and Chairman Ben S. Bernanke is scheduled to speak on monetary policy on Friday.

By Neil Irwin  | October 8, 2010; 1:45 PM ET
Categories:  Federal Reserve, U.S. Economy, Unemployment  
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Comments

Am I the smartest person in the country? The jobs are all in China and they aren't coming back and the illegal immigrants have the rest of them. Is there one single politician who knows what the hell to do about the unemployment problem or are you all blinded by corporate greed and corruption? I don't blame one party. They're all corrupt. Vote them all out. And change the system so those career politicians have the same lousy expensive medical benifits and no retirement left because Wall street investors and banks took it all. What does it take to change?

Posted by: boston61 | October 8, 2010 3:00 PM | Report abuse

Employers aren't hiring because sales are down. Sales will continue to be flat because employment is flat. Eventually, things will turn around but it won't start for another year ort wo - at LEAST and then, it will only be the sart of a very slow process.

But, using the national debt as an economic tool will bring about the recovery a little sooner AND will allow many people to survive until the recovery does arrive.

If not the the national debt, many of you people would never work again - ever.

Posted by: Anonymous | October 8, 2010 4:35 PM | Report abuse

I know they're saying it's not all bad news but I feel when we dig deeper into the problems our nation is having with unemployment it is now where near good news. I have had several buddies from university as well as former colleagues who have been laid of from their jobs and they have been working there for over five years. Companies are looking for any way possible to cut costs and keep their business moving today.

Personally, about a year ago I almost had to lay off several employees at my company. Some of these employees had been with me for over 10 years! I knew I had to make a decision where I wanted my company to go, and as a CEO you only want to go in one direction, up. I decided to call up Action Coach, which is a professional business coaching firm and they helped out tremendously. I am getting away from the point but my business is now doing much better and I did not have to follow suit like most companies today and lay off my employees. If you want to check them out go to coachmybusiness.net

I am tired of seeing friends, family, and former colleagues laid off. I know things can get better it just takes work from all of us.

Posted by: ceo_nick | October 8, 2010 5:09 PM | Report abuse

@ceo-nick

you're just a spammer

Posted by: boston61 | October 8, 2010 5:23 PM | Report abuse

If the FEDS whould really go after the ILLEGAL's ILLEGAL EMPLOYERS, this whould open new jobs for Americans as well as get the ILLEGALS off of the American taxpayers back. Most of these jobs ARE NOT in the fields but real jobs that belong to Americans that the ILLEGALS have at scab wages. No employment, the ILLEGALS will leave on their own. The laws are there only to be enforced.

Posted by: Anonymous | October 9, 2010 11:33 AM | Report abuse

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