Despite recent signs that the economy is improving, slow growth will continue to be the "new normal" for investors, Pimco co-CEO Bill Gross told CNBC.
As Wall Street cheered Friday's unemployment report, with its numbers that were far better than expected, Gross cautioned not to get too excited about growth prospects and scoffed at the notion that the Fed might need to start tightening monetary policy.
"You have to see the unemployment rate start to go down," Gross said, in a live interview. "We need an additional 200,000 jobs just to keep unemployment rates level, and for the Fed to start thinking about raising rates — that's not going to happen anytime soon."
Nonfarm payrolls shed 345,000 jobs in May and the unemployment rate moved to 9.4 percent.
The government will continue to need to pump stimulus dollars into the economy to keep things moving, he said, adding that Pimco, which runs the world's largest bond fund, expects growth of 1 to 2 percent for the next several years.
For investors, that will mean a temptation to get out of fixed income, but Gross said no one should expect great returns anywhere.
"The drag of the low money market rate becomes very much an incentive for investors to get anywhere except cash," he said. "'You have to be cautious, though, because ultimately markets will depend on economic growth and that economic growth will not be what we're used to."