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U.s. Payrolls Fall As Fed Monetary Easing Idea Advances

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The U.S. economy shed jobs in September for a fourth straight month as government payrolls fell and private hiring slowed, hardening expectations for more stimulus from the Federal Reserve to spur the recovery.

Nonfarm payrolls dropped 95,000, the Labour Department said on Friday, pulled down by the end of temporary jobs for the U.S. Census and steep losses at struggling local governments.

Private employment, a better gauge of the labour market, rose 64,000 after a 93,000 gain in August, below levels that would suggest a self-sustaining recovery from the recession.

The employment report was the last before the November 2 mid-term Congressional elections and was a blow for President Barack Obama's Democratic Party, trailing in opinion polls.

The unemployment rate was unchanged at 9.6 percent.

Analysts said it was now almost certain that the Fed would announce a second program of asset purchases next month, even though there appeared to be no consensus among policymakers.

"I think the Fed is going to act in November, they need to press harder on the accelerator. The outlook for 2011 is weakening because the labour market is struggling to gather any momentum at all," said Ryan Sweet, a senior economist at Moody's Economy.com on West Chester, Pennsylvania.

Printing money always works in stimulating demand. It cannot possible fail....

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The Dow broke through 11,000 on Friday for the first time since May, the latest mile marker in a rally that started in early September and has pushed the index up about 9 percent since then.

The surge this week has been fueled by expectations that more central banks, including the Federal Reserve, could follow the Bank of Japan in taking steps to stimulate their economies. And the move over the 11,000 level came after a disappointing jobs report which renewed expectations that the Fed could make its move at its next meeting in early November.

The last time the Dow broke through 11,000 was on May 4, when the high during the day reached 11,149.48 points before it fell back and closed at 10,926.77.

The Dow tipped into 11,000.19 at 11:25 a.m. Friday. If it holds onto its gains and closes above 11,000, it would be the first close above that level since May 3, when the session ended at 11,151.83.

Robert S. Tipp, a managing director and chief investment strategist for Prudential Fixed Income. cautioned against reading too much into the Dow breaking into new terrain.

“The market looks undervalued and I would expect to see resistance levels taken out,” he said “The market will fluctuate above and below and ultimately overcome those resistance levels.”

“What we are seeing is the prospect of the asset purchases from the Fed is putting downward pressure on the dollar, and very steady downward pressure on interest rates particularly on the first 10 years of the Treasury curve,” Mr. Tipp said.

The aim of propping up asset prices. Excellent.

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  • 415 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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