Fed May Keep Easing At ‘Full Throttle’ Until Jobless Rate Falls

[numper]

Jan. 5 (Bloomberg) -- Federal Reserve officials signaled they’ll probably push ahead with unprecedented stimulus until the recovery strengthens and many of the 15 million unemployed Americans find work

More QE?

[Realistbear]

Jonathan Spicer, 17:54, Wednesday 5 January 2011

NEW YORK (Xetra: A0DKRK - news) (

Reuters

) - U.S. private sector jobs surged in December at a rate

three times stronger than forecast,

a hiring report showed, the most bullish signal in months that a recovery in the world's biggest economy is stepping up a gear.

The ADP Employer Services private sector jobs report on Wednesday comes two days ahead of the U.S. government's closely watched payrolls report. Many economists raised their forecasts for a wider reading of jobs growth on Friday.

Ben's answer.

[Beggar Thy Children]

Well, best do some more QE anyway. You know, just to make sure.

[ken_ichikawa]

They are unafraid to go uber on the money printing. Now that the US mid term elections are over they can go forth and debauch the currency for 2 more years before the next elections.

Obama is not going to re-run as he'll get slaughtered.

[Gone baby gone]

God, I'm glad I'm not holding a load of US$!

[Misanthrope]

They are unafraid to go uber on the money printing. Now that the US mid term elections are over they can go forth and debauch the currency for 2 more years before the next elections.

Obama is not going to re-run as he'll get slaughtered.

Obama won't get a second term.

QE3 won't happen. They're only pushing on with the prescribed bad medicine.

Keep it simple, people!

[interestrateripoff]

For each billion of QE how many jobs have been created?

Shadow stats have unemployment at 20%+ hardly been a roaring success so far clearly more is needed.

Unless of course Bernanke is gambling if he debases the US currency enough he'll crash China and the globalists will bring the jobs back to the USA.

[interestrateripoff]

http://uk.reuters.com/article/idUKTRE7042N420110105

U.S. private sector jobs surged in December at a rate three times stronger than forecast, a hiring report showed, the most bullish signal in months that a recovery in the world's biggest economy is stepping up a gear.

The ADP Employer Services private sector jobs report on Wednesday comes two days ahead of the U.S. government's closely watched payrolls report. Many economists raised their forecasts for a wider reading of jobs growth on Friday.

"Sometimes numbers come as bolts from the blue; this is one of them," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

"Nothing in any other indicators of the state of the labour market last month -- jobless claims, help wanted, surveys -- suggested anything like this was remotely likely."

In another sign of strength in the U.S. economy, an industry group on Wednesday reported its gauge of the massive U.S. services sector reached its highest level in over four years.

The data sparked a sharp cut in prices of U.S. Treasury debt as investors bet on a stronger recovery.

And today we have this news.

[interestrateripoff]

http://market-ticker.org/akcs-www?post=176507

Now that's impressive....

Private-sector employment increased by 297,000 from November to December on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated change of employment from October to November was revised down but only slightly, from the previously reported increase of 93,000 to an increase of 92,000.

The media is orgasming this morning, but of course the real story here is that we don't know how much of this is seasonal (and will disappear in January) and how much of it constitutes actual permanent employment.

Here's the problem:

According to the ADP Report, employment in the service-providing sector rose by 270,000 in December, the eleventh consecutive monthly gain and the largest monthly increase in the history of the report. Employment in the goods-producing sector rose 27,000, the second consecutive monthly gain and the largest since February 2006. Manufacturing employment rose 23,000, also the second consecutive monthly gain.

Employment among large businesses, defined as those with 500 or more workers, increased by 36,000 while employment among medium-size businesses, defined as those with between 50 and 499 workers, increased by 144,000. Employment among small-size businesses, defined as those with fewer than 50 workers, increased by 117,000.*

That's consistent with a lot of seasonal hiring that was reported in December (they're now on the payroll) to handle the Christmas Holiday. And most of the hiring was among small and medium-sized business (which is what you'd expect), not large firms (e.g. WalMart).

Yes, I know, it's "seasonally adjusted." What I want to see on Friday is the household data, because that's where we'll see big moves - if they happened - in the labor participation rate and the not-in-labor-force numbers.

This is a strong report, without question - and if we saw it in January (or really any other months than November and December) I'd be impressed. As it stands with the anomalous reports (compared to my expectations) coming into the season I'm reserving judgment.

(It appears the market is a bit skeptical that this is more than seasonal hiring as well - that we're not up 20 handles on the /ES futures following the report; the move was +4 from where it was prior to the report which certainly isn't what you'd expect with a "surprise" of this magnitude.)

Dennigers take on the employment figures.

[The Masked Tulip]

Unless of course Bernanke is gambling if he debases the US currency enough he'll crash China and the globalists will bring the jobs back to the USA.

That can only be his plan. That is why buying into commodities is so dangerous as ultimately they willcrash and burn when, not if, the Chinese economy crashes.

IMPO what Bernanke is doing is economic war - eaconomic war on all nations but aimed primarily at the Chinese.

The problem is, now he has started he has to continue through to the bitter end which will mean QE3 and more.

[interestrateripoff]

http://www.telegraph.co.uk/finance/currency/8241635/Brazil-pledges-to-stop-US-melting-the-dollar.html

Guido Mantega, the Brazilian finance minister, raised the prospect of introducing greater controls on short-term flows of speculative capital into his country.

The Brazilian real has risen more than 35pc against the dollar since early 2009 leading some economists to label it the most over-valued currency in the world.

There is widespread concern about the effects of a weaker dollar on the competitiveness of emerging markets, many of which have seen foreign investment send their currencies soaring.

"We're not going to allow our American friends to melt the dollar," said Mr Mantega, who views the US government's move to pump $600bn (£387bn) into its economy as an unfair attempt to help exports

It would also seem the US dollar is fleeing America and being spent elsewhere. I can't see how this creates US jobs, but it will probably create nice profits for Wall Street.

[fellow]

how does printing money create jobs? And how does this make America a more prosperous country, allowing it to compete with the likes of China. The answer of course is that it doesn't but in fact will make every American poorer (except the bankers of course). Deliberately doing so is treason?

Edited January 5, 2011 by fellow

[scepticus]

how does printing money create jobs? And how does this make America a more prosperous country, allowing it to compete with the likes of China. The answer of course is that it doesn't but in fact will make every American poorer (except the bankers of course). Deliberately doing so is treason?

printing money doesn't create jobs directly but actually what is happening is that risk free government bonds - money for doing nothing - are being withdrawn form the market - since it is the existence of a risk free return on capital that is causing most of the problems with employment.

All other alternative investments have risks and/or carrying costs, all of which ensures that money will leak out of these investments and into wages.

More detail here:

http://liminalhack.wordpress.com/2010/11/11/read-all-about-it-the-federal-reserve-is-monetising-debt-and-giving-free-money-to-speculators/

Edited January 5, 2011 by scepticus

[ken_ichikawa]

how does printing money create jobs? And how does this make America a more prosperous country, allowing it to compete with the likes of China. The answer of course is that it doesn't but in fact will make every American poorer (except the bankers of course). Deliberately doing so is treason?

What do you mean...... Zimbabwe and people in Harare are not the wealthiest people on earth..... but ... but the printing press is supposed to be magical like unicorns

[Guest spp]

Surging food and commodity prices are down to bad weather and demand (according to the bbc news at 10)

Not even a mention of dodgy 'money' printing!

Inflation...UNEXPECTED I bet!

The combination of the above is the trigger for the next big one...The Government debt ticking time bomb.

[Guest spp]

That can only be his plan. That is why buying into commodities is so dangerous as ultimately they willcrash and burn when, not if, the Chinese economy crashes.

IMPO what Bernanke is doing is economic war - eaconomic war on all nations but aimed primarily at the Chinese.

The problem is, now he has started he has to continue through to the bitter end which will mean QE3 and more.

The world's biggest creditor nation v the world's biggest debtor.

You sound so sure of all that TMT .

Hyperinflation is the loss of faith in the currency/Government.

Who is the biggest holder of the $, the biggest dumper of the $, and who's buying up the planet?

Now what was that about commodities? All the best with that paper stuff you call wealth.

[The Masked Tulip]

The world's biggest creditor nation v the world's biggest debtor.

You sound so sure of all that TMT .

Hyperinflation is the loss of faith in the currency/Government.

Who is the biggest holder of the $, the biggest dumper of the $, and who's buying up the planet?

Now what was that about commodities? All the best with that paper stuff you call wealth.

I think people who write off the US are making a big mistake.

[salamander]

I think people who write off the US are making a big mistake.

With the greatest of respect I don't think you could be more wrong. We have:

- Annual US deficits in the trillions and showing no signs of shrinking

- Printing of dollars reducing the demand for dollar debt- all US debt yields increasing

- China and Russia commencing trading in their own currencies and not USD (again reducing the demand for dollars)

- Oil producing countries selling oil in currencies other than dollars (see above)

- Commodities (priced in dollars) soaring reducing the purchasing power of the currency.

Given this is there anything at all to love about the dollar ? It probably has no more than a couple of years (max) life left in it before the big US debt holders convert enough of their dollars into tangible assets that they're happy to let the rest go kaboom.

[Guest spp]

I think people who write off the US are making a big mistake.

No doubt they can comeback...the problem is the debt.

[aa3]

I think it is a good plan. You know there is plenty of slack in the economy if 15 million people previously employed cannot find work. On the other hand if there is a huge expansion in hiring by firms, and spare labour is going into short supply, that is a good sign to stop going full throttle.

[aa3]

For each billion of QE how many jobs have been created?

Shadow stats have unemployment at 20%+ hardly been a roaring success so far clearly more is needed.

Unless of course Bernanke is gambling if he debases the US currency enough he'll crash China and the globalists will bring the jobs back to the USA.

So far they just aren't printing, borrowing and spending hard enough. They are doing just enough to stop things from getting worse.

If they wanted to really get things going, 100 billion dollars should fund ~1 million jobs that pay an average of 100,000$ a year(including all benfits).

Since 15 million are unemployed that weren't before, 1.5 trillion a year would get them all employed at 100k a year.

[Confounded]

So far they just aren't printing, borrowing and spending hard enough. They are doing just enough to stop things from getting worse.

If they wanted to really get things going, 100 billion dollars should fund ~1 million jobs that pay an average of 100,000$ a year(including all benfits).

Since 15 million are unemployed that weren't before, 1.5 trillion a year would get them all employed at 100k a year.

What would full employment and an expanded monetary base do at a time where the market was trying to heal itself from the excesses of the largest financial bubble in history?