Tags: Fed | Easing | Jobs | economy

Experts: Don't Expect Fed to Launch More Easing on Dismal Jobs Numbers

Friday, 06 Apr 2012 01:35 PM

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The U.S. economy added a net 120,000 nonfarm jobs in March, far below expectations of more than 200,000, but don't expect the Federal Reserve to overreact and rush to stimulate the economy via easing measures, experts say.

The average figure for the first quarter comes to 212,000, which depicts a solid broader trend, and the Federal Reserve won't move on monetary policy over one economic indicator, some experts say.

The news sent the dollar weakening on concerns the Fed would purchase assets from banks designed to jolt the economy, a policy known as quantitative easing and dubbed by market observers as QE.

Editor's Note: Study: Bernanke Intentionally Devalued the Dollar

The Fed has rolled out two rounds of quantitative easing in the past, and the March jobs numbers have rekindled talk of a QE3.

"The Fed is not going to be happy about the jobs report but it's not going to overreact to any one number either. There is a lot of volatility month to month in the jobs report," Steve Blitz, senior economist for ITG Investment Research in New York, tells CNNMoney.

Others point out that even with high gasoline prices crimping economic recovery, the Fed will still take its time before stimulating the economy via easing, which weakens the dollar, pumps up stock prices and sparks concern that monetary policy officials are more concerned about steering the country away from collapse than they are about inflation.

"The impact of higher gas prices is not in full force yet. But QE3 is still not likely at this point," says Scott Brown, chief economist with Raymond James in St. Petersburg, Fla., CNNMoney adds.

"The recovery would have to falter more significantly."

Other experts saw no cause for alarm.

"One disappointing jobs report is not reason to panic, but it will dampen some of the optimism about the strength of the recovery this year," Nigel Gault, chief U.S. economist at IHS Global Insight, writes in a note to clients, according to The Wall Street Journal.

Editor's Note: Study: Bernanke Intentionally Devalued the Dollar



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