Job growth: Not disappointing enough to alter QE plans

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

Jobs report good enough to keep Fed taper on track


The news giveth and the news taketh away.

On Thursday, the markets were thrilled with the government's low unemployment numbers. Today, the government said, "But wait!" Job growth was a meager 162,000 in July, far below the 184,000 economists had expected. Whisperers on the Street had mentioned 200,000.

Fortunately, the disappointment wasn't bad enough to hammer stocks, which ended the last day of trading for the week in the green. That may be because the number was not off enough to add new uncertainty to the great tapering debate. Unemployment fell to 7.4 percent, a four-year low just below the 7.5 percent predicted. But that minor improvement was offset by a dip in the labor participation rate.

Separately, the Commerce Department said consumer spending had inched up 0.5 percent in June. Inflation was up 0.4 percent for the month, but only 1.3 percent over the past year. That's not enough to scare the Fed, which has a 2 percent target.


"The self-sustaining trend in employment growth is likely strong enough to allow the Federal Reserve to begin tapering its quantitative easing by the end of the year."
—Kathy Bostjancic, director of macroeconomic analysis at The Conference Board

"Bottom line: Disappointment, but not enough disappointment to dissuade the Fed from ending QE."
—Steve Blitz, chief economist at ITG

"August data points will be decisive in ... whether the Federal Reserve tapers in September. My sense is that assuming Europe and China don't blow up, slow progress might be enough. ... Some central bankers seem to think the risks of maintaining the program outweigh the benefits."
—CNBC's Bob Pisani

Whose dime is it, anyway?


Here's another hint the labor market is improving, though employers might have mixed feelings about it.

A poll by Accountemps, the staffing firm, finds that about three in 10 workers feel good enough about their marketability to job-hunt while they're at work. Presumably, in a weak job market, employees—whether in a cubicle or an executive suite—wouldn't risk antagonizing the boss by trolling job sites or taking a recruiter's call while at work. Those are the kinds of things the polled workers said they'd do.

CareerBuilder says about two-thirds of its visits occur during business hours. Those folks can't all be unemployed.

Job-hunting experts say it's generally OK for the hunter to take a quick call to schedule a meeting but that a prospective employer can be turned off by a candidate who's disrespectful of the current employer. Of course, using the current firm's phones and email just begs discovery—and nasty consequences.


"[There's] more action in the marketplace."
—Dawn Fay, district president for Accountemps parent Robert Half International

Postal Service revenue remedy


"Neither snow nor rain nor heat nor gloom stays these couriers from the swift completion of their appointed rounds." So goes the postal service creed.

And we can hope they won't be stalled by bourbon, scotch or beer, either.

If Postmaster General Patrick Donahoe gets his way, mail carriers will eventually deliver alcoholic beverages, a service that's illegal now. He sees it as a way to raise about $50 million a year toward closing the Postal Service's annual losses, expected to be about $15 billion this year.

OK, that's the fun part. The serious news is he also wants to end Saturday service, a move that terrifies many businesses. And he'd like to stop delivering to the front door in favor of mailboxes at the street.

Last year, the Senate actually passed a bill with a provision allowing alcohol deliveries to people aged at least 21, so long as state laws were observed. A House measure ignored the idea.


"There's a lot of money to be made in beer, wine and spirits. We'd like to be in that business ... We don't want to take any more debt on. We want to be able to get profitable, pay it down, just like any other business would."
— Postmaster General Patrick Donahoe

Less isn't more, it's less


Quick, name the best ways to drive your customers away. Surly service, dropped calls, products that don't work ... it's a long list.

And let's not overlook one way that's become very popular: replacing product with air and charging the same price. It turns out that's become a common tactic for products like cake mixes.

Worried that consumers will resist price increases, producers have resorted to a bag of tricks to offset rising costs of ingredients like cream and cocoa. They'll put less product in the same-sized box, so the homemaker gets 18 cupcakes instead of 24. They'll pump air into the ice cream, or put a big "dimple" in the bottom of the peanut butter jar, so it holds less.


"Rising ingredient costs have driven most, if not all our competitors and most other food industry companies, to downsize in order to maintain profit margins."
—Deb Powers, director of merchandising for King Arthur Flour

"The smaller mixes result in cakes with less volume and less structure, making them shrink while cooling and crumble when sliced."
—Anne Byrn, author of "The Cake Mix Doctor" cookbook series

—By Jeff Brown, Special to