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VOL. 36 | NO. 13 | Friday, March 30, 2012




Fed officials worried US job gains could fade

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WASHINGTON (AP) — Federal Reserve policymakers are worried that recent strong gains in hiring could fizzle if U.S. economic growth doesn't pick up. But there's no widespread support for additional bond purchases, even if the economy worsens.

The Fed minutes from the March 13 meeting disappointed Wall Street. Stocks and Treasury prices fell after the minutes were released Tuesday.

Members spent very little time discussing another round of bond purchases, the minutes showed. When the idea was mentioned, only a couple members said they would support it and only if the economy lost momentum or inflation stayed below the Fed's target rate of 2 percent.

The Fed stuck with its plan to keep interest rates at record lows until at least late 2014. And the Fed sketched a slightly sunnier view of the economy, largely because of the best three months of hiring in two years.

But members noted in the minutes that there have been similar bursts of hiring in the past two years that ended up fading.

"Even though Fed officials remain cautious about the economic outlook, there is little, if any, support for any new program of asset purchases in the short term," said Paul Ashworth, chief U.S. economist at Capital Economics, in a note to clients.

David Jones, chief economist at DMJ Advisors, put it more bluntly: "More bond buying may still be on the table, but just barely."

The Dow Jones industrial average dropped 85 points in late-afternoon trading. It had been down 40 points before the minutes were released. The yield on the 10-year Treasury note rose to 2.27 percent from 2.16 percent earlier Tuesday. The yield moves in the opposite direction of the price.

The readout from the Fed's last meeting largely echoed a speech Fed Chairman Ben Bernanke delivered last week to a gathering of economists.

The Fed is concerned that the recovery could falter, as it did last year. Americans aren't receiving meaningful pay increases. Gas prices are high. And Europe's debt crisis could weigh on the U.S. economy.

As long as inflation remains tame, analysts think the Fed will likely hold interest rates down to give the economy more support. Most economists don't think Fed officials will change their interest-rate policy at their next meeting on April 24-25 and will ease credit only if the economy slows further.

Still, the outlook for the economy is improving.

Employers added an average of 245,000 jobs a month from December through February. The unemployment rate has fallen nearly a full percentage point since summer, to 8.3 percent.

The government will report Friday on the job market in March. Many economists believe that report will show another strong month of job creation with a net gain of 210,000 jobs. They expect the unemployment rate will hold steady at 8.3 percent.

U.S. consumers boosted their spending in February by the most in seven months, raising expectations for stronger growth at the start of the year.

Americans spent more even as their income barely grew. To make up the difference, many saved less.

Many people are more confident in the economy, despite stagnant wages and higher gas prices. The University of Michigan Consumer Sentiment Survey index rose last month to its highest level since February 2011.

The economy grew at an annual pace of 3 percent in the October-December quarter. Most economists expect slightly slower growth in the current January-March quarter.

Bernanke said the combination of modest economic growth and rapid declines in unemployment is something of a puzzle. Normally, it takes growth of roughly 4 percent annual growth to lower the rate by 1 percentage point over a year.

Bernanke cautioned that he doesn't expect the unemployment rate to keep falling at its current pace without much stronger growth and more robust hiring.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0