Overall, sentiment towards today’s disappointing jobs report was negative.Goldman’s Jan Hatzius, Morgan Stanley’s David Greenlaw, and UBS’s Sam Coffin have all ramped up their expectations for more easy monetary policy out of the upcoming Federal Open Market Committee (FOMC) meeting.
JP Morgan’s Michael Feroli agrees: “Today’s number increases our conviction in our existing Fed call which looks for the FOMC to engage in further asset purchases and to push back rate guidance at next week’s meeting.”
In a new note titled Summer’s Over, Here’s Your Slap In The Face, Feroli points to all of the ugly metrics in the jobs report that reflect an economy that “appears to be stuck in the mud.”
“The weak pace of labour income growth will likely limit the pace of consumer spending, which in turn means continued unsatisfactory GDP growth,” he writes.
Feroli is also confused by the fact that two of America’s rebounding industries aren’t generating more jobs.
“The hoop-la over the housing recovery has yet to translate into employment, as construction added a paltry 1,000 jobs last month,” he writes. “Ditto fracking: only 1,000 jobs gained in the oil and gas sector.
“Overall a pretty dreary picture of the labour market.”
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