Economists differ on whether Fed will scale back stimulus based on jobs report

By: Associated Press Email
By: Associated Press Email

Some economists say last month's strong hiring numbers probably won't be enough to get the Federal Reserve to scale back its bond-buying stimulus program when it meets in mid-December. But others say the job growth might prod the Fed to slow the stimulus soon.

The government says the economy added 204,000 jobs last month, and that far more jobs were created in August and September than had been estimated earlier. The unemployment rate rose to 7.3 percent from 7.2 percent, but it was likely because workers furloughed by the partial government shutdown were temporarily counted as unemployed.

The surge in jobs signals that many U.S. companies shrugged off the shutdown.

Job growth is a major factor for the Federal Reserve in deciding when to reduce its economic stimulus.

Patrick O'Keefe, head of economic research at CohnReznick, says the job growth isn't enough to get the Fed to end the stimulus program. He says, "It leaves them on hold for at least the next meeting." But Paul Ashworth of Capital Economics says the Fed would be justified in scaling back its bond purchases in December.

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