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Fed math: 169,000 jobs equals a fraction of taper

Jeff Brown, Special to CNBC.com
Friday, 6 Sep 2013 | 4:46 PM ET
Ben Bernanke, chairman of the Federal Reserve.
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Ben Bernanke, chairman of the Federal Reserve.

Recapping the day's news and newsmakers through the lens of CNBC.

Taper-lite

Notes:

The drumroll has been building all week for the all-important jobs report, with high hopes it would prove the economy's really strengthening. Well, maybe next month's report will be better. This one shows 169,000 jobs created in August, well shy of the 180,000 expected. The June and July figures were sharply reduced.

Unemployment did decline a tad to 7.3 percent, from 7.4 percent, but only because fewer people are looking for work.

Overall, the numbers seem to support the prospects that the Federal Reserve will announce a modest reduction in its bond-buying program rather than a large one at its Sept. 18 meeting. That might reassure investors worried that a bigger cut would undermine stocks and bonds.

Others say not to make too much of the disappointment: It was the U.S. porn industry's fault.

Quotes:

"It should do wonders for settling some of the indigestion suffered by worrywarts in the bond market. The word 'Goldilocks' springs to mind somewhere, but we're not quite sure where to place it."
—Andrew Wilkinson, chief economic strategist at Miller Tabak

"It does make it so the taper is going to be light."
—CNBC's Jim Cramer

Hundreds of job applicants line up at a job fair in New York City.
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Hundreds of job applicants line up at a job fair in New York City.

Arrested development

Notes:

Housing is a big factor in the economy. So what do the latest jobs numbers say about this sector?

Obviously, continuing high unemployment means lots of people can't afford to move. The official 7.3 percent number is bad enough, but including the workers who aren't counted because they've given up job-hunting pushes the "real" number to 11 percent or higher. Another concern is the 7.8 percent unemployment rate for young adults, a number that's also considerably higher if non-job hunters are included. These folks won't be buying homes anytime soon.

Quote:

"Without jobs, fewer young adults will buy, rent, or even move out of their parents' homes, which holds back future household formation and longer-term demand for new construction."
—Jed Kolko, chief economist for Trulia

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Protectionist profits

Notes:

How much should big international companies pay in taxes? More than they are now—a good deal more. That's the view coming out of the G-20 summit in Russia. President Barack Obama and the other leaders have signed on to a plan that would make it harder for companies to hoard profits in tax havens. Of course, it could take years for this idea to become a reality, if it ever does.

Quote:

"We don't want to discourage the companies from creating jobs. But we obviously don't want to encourage companies to take away the profits and squirrel them away and not share them with anybody else."
—Angel Gurria, head of the Organization for Economic Cooperation and Development

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Luxurious leases

Notes:

Got a hankering for a new BMW, Lexus or Mercedes? Well, now's the time. Cut-rate deals on leases are so good that sales in the luxury car market leaped a breathtaking 31.5 percent in August, nearly double the already impressive gains for the car industry as a whole.

Leases on luxury models typically run to $600 or $700 a month, but now Lexus, for example, has a 24-month deal on the 2014 IS 250 for just $259 a month.

Quote:

"Look for rich deals from the luxury players as we near the end of the year."
—CNBC's Phil LeBeau

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Terminal tones

Notes:

Once upon a time, travelers liked getting away from it all. But if you travel for work, or just can't live without hearing your ringtone every 10 minutes, you know how important it is to be wireless-capable all the time, like at the airport.

So who has the best cell service at the terminal? Because of their faster deployment of 4G service, Verizon and AT&T beat out T-Mobile and Sprint, according to a new study.

Quote:

"Across the 50 airports that we tested, Verizon was the only carrier to record a perfect score for network reliability."
—RootMetrics President Bill Moore

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