This morning’s reported jobs data is better than expected. Employers cut 36,000 jobs last month, better than the 50,000 cuts forecast by economists polled by Thomson Reuters. The unemployment rate held steady at 9.7 percent. Economists were expecting it to rise to 9.8 percent.
However, co-CIO of PIMCO Bill Gross was quick to remind us that we need a net creation of 200,000 jobs each month for the unemployment rate to stay put. Bill Gross and his firm PIMCO advocate the notion of “new normal” scenario which dictates that the U.S. economy will grow slowly and the unemployment will stay high in the next couple of years. Gross believes the economy will be in “perpetual spring and perpetual fall”, but not in high noon summer. The reason? It takes a number of years for the private sector to deleverage.
With regard to the Fed’s scheduled stopping of purchasing the agency papers, a measure to support the real estate, Gross thinks the measure may have to be restored.
He expects some type of bailout for Greece but the European economy to face tough times as well. "In the meantime, Greece and Portugal and Spain and some of the lookalikes will continue to flounder in terms of yield spread and certainly in terms of economic growth," he said.
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However, co-CIO of PIMCO Bill Gross was quick to remind us that we need a net creation of 200,000 jobs each month for the unemployment rate to stay put. Bill Gross and his firm PIMCO advocate the notion of “new normal” scenario which dictates that the U.S. economy will grow slowly and the unemployment will stay high in the next couple of years. Gross believes the economy will be in “perpetual spring and perpetual fall”, but not in high noon summer. The reason? It takes a number of years for the private sector to deleverage.
With regard to the Fed’s scheduled stopping of purchasing the agency papers, a measure to support the real estate, Gross thinks the measure may have to be restored.
He expects some type of bailout for Greece but the European economy to face tough times as well. "In the meantime, Greece and Portugal and Spain and some of the lookalikes will continue to flounder in terms of yield spread and certainly in terms of economic growth," he said.
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