The U.S. created 151,000 jobs in August, short of the 180,000 economists were predicting. The latest disappointing jobs number comes after two straight months of strong gains.
That number complicates things for the Federal Reserve ahead of its September meeting.Allianz Chief Economic Adviser Mohamed El-Erian tells Benzinga
“While falling short of consensus expectations, the report confirms that a robust labor market continues to underpin a solid US economy that still falls short of escape velocity,” El-Erian said in an email.
“The report puts the Fed in a particularly tricky situation when their high level policymaking FOMC committee next meets on September 20-21.”
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According to El-Erian, the U.S. economy is certainly not firing on all cylinders, but the long-term impact of historically low interest rates could be grounds for a rate hike sooner rather than later.
“It is not uniformly strong enough to make a hike a slam dunk,” he said of the August jobs number. “But it is solid enough for a credible case for a hike given the negative spillover effects of a prolonged period of ultra low interest rates.”
Investors certainly seem to like what they saw in the jobs report. The SPDR S&P 500 ETF Trust SPY is up 0.4 percent on Friday.
El-Erian's comments were originally published on Benzinga Pro.
Photo credit: Fortune
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