Friday, January 10, 2014

US Labor Department December Report / US Federal Reserve Taper

Today, US Non-Farm Payrolls reported a paltry 74K increase in December, short of the 200K jobs economist consensus had expected. Unemployment fell to 6.7%, but the U6 Total Unemployment was unchanged above a troubling 13%. The Civilian Labor Force Participation fell to a disturbingly low 62.8%:
The very low Civilian Labor Force Participation Rate has not been this low since 1978, which may be a significant factor in the US Federal Reserve's Taper decisions, overshadowing the improved but somewhat deceptive Unemployment Rate improvement. I expect the Fed's next move will be to maintain its bond buying program at $75B or reduce it by only a modest $10B (consistent with last move):

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