Jobs report ‘smells a little like tapering’

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With unemployment dropping to a healthy 7 percent in November, some analysts are speculating that the Federal Reserve will pull back on bond-buying that helps keep mortgage rates low sooner, rather than later.

“At some point the Fed will have to accept that the labor supply is trending lower, and hence that the decline in the unemployment rate truly represents progress toward their full employment mandate,” wrote JPMorgan analyst Michael Feroli, commenting on the Bureau of Labor Statistics’ November employment stats released today. Feroli, who also noted that the jobs report “smells a little like tapering,” predicted the Fed would begin tapering its bond-buying program in January.

Jon Hilsenrath, the chief economics correspondent for the Wall Street Journal, had a similar take today: ”Strengthening payroll employment gains lay the groundwork for the Fed to begin pulling back on its $85 billion-per-month bond-buying program and increases the odds that it will start either in December or January,” he wrote.

Source: Quartz

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