Friday’s jobs report released by the Labor Department created uncertainty among market watchers as to whether the Fed will start tapering any time soon.
The economy created 169,000 jobs in August, the report said, fewer than the 180,000 expected, and unemployment dipped to 7.3%.
“Ultimately, we view the jobs report to be mostly noise from month to month, especially with a fairly ‘middle of the road’ report like this one with some pluses and minuses,” Michael Kitces, director of research for Pinnacle Advisory Group, a private wealth management firm located in Columbia, Md., and a ThinkAdvisor blogger, told ThinkAdvisor on Friday.
Like other market watchers, Kitces says the real issue heading into the fall is whether the Fed begins to taper or not. “There doesn’t seem to be much indication from today’s jobs report that definitively confirms the taper will or will not get under way soon.”
But David Kelly, chief global strategist at J.P. Morgan Funds, noted in his weekly commentary, released Monday, that “in light of last week’s upward revision to second-quarter GDP, a number of 150,000-plus on payrolls and 7.4% on unemployment would probably be enough to keep the Fed on track to begin a wind down to QE, with an announcement likely coming in a press release and Bernanke news conference following the Sept. 17-18 FOMC meeting.”
Reuters columnist Felix Solomon opined that the August report showed “that the reality of the economy was not as good as we thought it was, and that the market probably got ahead of itself in anticipating a taper beginning very soon.”