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Pimco's El-Erian on U.S. July Jobs Data, Fed Policy

August 06, 2012 | About:
Dheeraj Grover

Dheeraj Grover

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Mohamed El-Erian, chief executive officer and co-chief investment officer of PIMCO, discusses July U.S. employment report, Federal Reserve policy, impact on the U.S. economy and Europe's debt crisis.

Here is the brief summary of what he said:

— U.S. July job report is mixed. Headline numbers beat which is good news. However, the participation rates came down and those who are struggling continue to struggle — teenage unemployment is going up and also going up for those with less than a high school diploma.

— Do we need another round of QE3? Jobs number is a mixed number; it is a muddling number, not strong enough to suggest that the economy is about to take off and not weak enough to confirm that the Fed will come in.

— QE3 action from Fed will happen in September but will be ineffective as the Fed does not have many tools left.

— Europe Crisis: It will take weeks not days for the ECB to interfere to support countries like Spain.

— U.S. Economy: Good news is that the U.S. is healing. The bad bad news is the EU continue to be critical.

Here is the video:

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