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More reason for job report jitters

Wednesday, June 05, 2013 - 02:03

June 5 - The latest data show job creation is not working as well as hoped, sparking concerns ahead of Friday's jobs report. Bobbi Rebell reports.

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Getting more Americans back to work is not working as well as had been hoped. The latest ADP report fell short of forecasts- the private sector adding only 135,000 new jobs in May. And a separate report showed job growth in the services sector was weak last month. The numbers come just a couple days ahead of the government's jobs report. Non-farm payrolls are expected to come in at 170,000. Fact and Opinion Chief Economist Bob Brusca: SOUNDBITE: BOB BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS (ENGLISH) SAYING: "These reports have come in on the weak side, and it looks like the sort of a 170 (thousand), 175 (thousand) number that people were looking for is a little bit beyond the reach for the headline of this job report. So I think we are going to see a little bit of a weaker number. I think we'll see a headline of 150 (thousand). We'll see private jobs around 160 (thousand), and the risk now is that they will be weaker than that." The weaker number did little to comfort investors who are still worried the Fed may taper back its bond buying. SOUNDBITE: BOB BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS (ENGLISH) SAYING: "The Fed has just been looking at this breadth of job numbers in the same range, and finally decided, 'oh, look at these numbers. Well I guess this is where we are. This is normalcy, and we are staying here and we are not slipping down. I guess we better adjust to this new reality.' So, it's not that the economy needs to get that much better. It's just that it needs to not slip." But there are signs of slippage elsewhere. Mortgage rates jumped to their highest in over year - driving load demand lower. Kevin Cummins of UBS: SOUNDBITE: KEVIN CUMMINS, ECONOMIST, UBS (ENGLISH) SAYING: "That does jeopardize the one part of the economy that seems to be leading here in the U.S. is housing. And a backup in mortgage rates certainly would jeopardize the strength of the recovery that we are so far have had in the housing sector." Also adding to worries: The Federal Reserve's Beige Book characterized the pace of economic expansion as just modest to moderate since mid April- with hiring in their words "subdued". But with the Dow dropping more than 200 points on Wednesday, investors still believe the Fed is preparing an exit strategy.

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More reason for job report jitters

Wednesday, June 05, 2013 - 02:03