US Economy 'Has Fallen off a Cliff': El-Erian
The nonfarm payrolls data may be even worse than the consensus estimate, as the U.S. economy is taking further blows from the financial crisis, Mohamed El-Erian, Co-CEO of Pimco, told CNBC Friday.
October's employment report is scheduled for release at 8:30 am New York time, with the consensus forecast for a loss of 200,000 nonfarm payrolls, but some economists are even predicting a decline of as many as 300,000 jobs.
"It's going to be a bad number, I suspect you're going to see 200,000 plus," El-Erian said. "It's going to confirm what the numbers have been telling us for the last few weeks: the US economy has fallen off a cliff in the last few weeks."
The US consumer faces the "triple whammy" of employment destruction, savings destruction and the credit crunch, he said. Payrolls have declined by a total 760,000 in the first nine months of the year.
But actions by European central banks on Thursday, when the Bank of England slashed rates 150 basis points and the European Central Bank cut by 50 basis points, show policy-makers have realized joint action was needed, El-Erian added.
"It's a global problem, it needs a correlated solution," he said.