Nov. 8 - The job market is looking a lot stronger than many thought- resetting expectations of how soon the Federal Reserve could start cutting back economic support. Bobbi Rebell reports.
Taper talk is getting louder once again- now that data shows far more jobs are being created than expected, despite concerns about the impact of October's partial government shutdown. Non-Farm payrolls up more than 200,000 in October, and revised up in both August and September. And while the unemployment rate edged higher, the average work week held steady and the hourly earnings rose. While this is good news - now the worry is just when will the Fed taper. Wells Fargo Chief Economist John Silvia: SOUNDBITE: JOHN SILVIA, CHIEF ECONOMIST, WELLS FARGO (ENGLISH) SAYING: "There is a risk, of course, from the Fed's point of view, if they start delaying the tapering, they may be behind some of the let's say inflation pressures, because we saw the inflation numbers yesterday and the GDP number picking up a little bit. So the Fed could fall behind as far as some inflation targets go. It is a risk for the market place that you might have better growth but slightly higher inflation overall. " It's not all rosy- the labor participation rate fell in October- to 62.8 percent- the lowest since 1978. And a separate report- the Thomson Reuters/University of Michigan consumer sentiment report- showed that dipped in November to a near two-year low. The Obama administration contends the shutdown did hurt the economy- and says continued political uncertainty with upcoming deadlines will discourage private employment. Labor Secretary Thomas Perez: SOUNDBITE: THOMAS PEREZ, U.S. SECRETARY OF LABOR (ENGLISH) SAYING: "We've got to eliminate this governance by manufactured crisis that we see from some in Congress, and make sure that we provide that certainty that employers will have to have, because it's remarkable how resilient the economy is, notwithstanding the roadblocks that some put in the way." And it's just that uncertainty that could keep the Fed from taking action until next year. JPMorgan's Jim Glassman: SOUNDBITE: JIM GLASSMAN, SENIOR U.S. ECONOMIST, JPMORGAN CHASE (ENGLISH) SAYING: "I think in December we'll still be in the middle of- Congress has to figure out whether they can do anything to avoid the sequestration cuts that kick in, in January. So there will be a lot of debate and unknowns about that. I would not be surprised if the Fed just waits until the New Year." Although most economists still believe the Fed won't cut back its economic support until next year, some economists are now saying December is at least a possibility.