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Weak jobs report isn't all that bad: El-Erian

Former Pimco co-CEO Mohamed El-Erian sees some positives in the weak August jobs report—numbers most other economists dismissed as one-off data that should not be believed.

"My reaction when it came out: It's not that bad," El-Erian said Monday on CNBC's "Squawk Box."

The U.S. economy added only 142,000 nonfarm payrolls last month, the Labor Department said Friday, while the unemployment rate fell slightly to 6.1 percent. The report also said labor-force participation declined to 62.8 percent, or 64,000 workers, tying the 2014 bottom and remaining at the lowest level since 1978.

"If you look at what happened to long-term unemployment, down by 192,000 to 3 million, ... if you look at the improvement in the unemployment rate, that was genuine. It wasn't due to a fall in participation rate."

Read MorePayroll growth slumps in August; rate down to 6.1%

After the report was issued, three economists across the political spectrum reacted on CNBC in much the same way.

"I don't believe it," said Moody's Analytics Chief Economist Mark Zandi, who puts together ADP's monthly private sector jobs numbers.

"This is anomalous." said Alan Krueger, former chairman of President Barack Obama's White House Council of Economic Advisers.

"There's going to be an upward revision," said former Mitt Romney economic adviser. Kevin Hassett.

Read MoreDon't believe weak August jobs data: Economists

El-Erian did not rule out an upward revision, but told CNBC that such a move would only bolster his case that the weak August labor report won't impact Federal Reserve policy.

"My baseline for the Fed is they exit QE completely by October. The first rate hike will probably come in the middle of next year," he said. "The balance of risk is [the rate hike] comes slightly earlier rather than later."

Read MoreFed to debate new language on interest rates

El-Erian's expectations on phasing out bond purchases are in line with guidance from the Fed, and his thoughts on the possible start of increasing interest rates is about what most economists are forecasting.

—By CNBC's Matthew J. Belvedere

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