Employment figures were less than expected for August, disappointing investors and increasing the likelihood the Federal Reserve will take further action to spur economic growth. Payrolls added 96,000 jobs for the month, lower than the average of 139,000 since the beginning of the year and 153,000 per month in 2011. Although the unemployment rate fell from 8.3% to 8.1%, most of the decrease came from job-seekers dropping their search altogether.
In the least kept secret in investing, Bill Gross, co-CIO of PIMCO, said the numbers will move the Fed to initiate some sort of quantitative easing, commonly known as QE3.
Policy makers will give "strong hints" or provide "positive action" at next week's Federal Open Market Committee meeting, Gross said in a radio interview on Friday with "Bloomberg Surveillance." The Fed will likely ease further through "open-ended" purchases of Treasuries and mortgages and extend its pledge to keep interest rates low into 2015, he said.
Gross was joined by economist Nouriel Roubini, known for his gloomy predictions, who told CNBC Friday that he is "still pessimistic on the outlook for the U.S.—and that he expects a further round of quantitative easing from the Federal Reserve in December."
"If today's jobs number is OK, then the Fed can wait to do QE3," Roubini (right) told the network at the Ambrosetti Forum in Lake Como, Italy, prior to a the release of the employment report.
