Employment Report Disappoints but Probably Won’t Delay Federal Reserve’s Tapering Plan

The September employment report disappointed analysts; will it also complicate the Federal Reserve’s plan to begin withdrawing the monetary support that has cushioned the economy throughout the pandemic?

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Manufacturing activity and retail sales are gaining strength but consumer confidence has dipped (again); the February employment numbers were better than expected, but home sales disappointed most analysts and the commercial real estate market is beginning to scare just about everyone.

The continued flow of improving economic reports is making analysts more optimistic about the outlook and more confident that the recovery is sustainable.

"We have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold," Federal Reserve Chairman Ben Bernanke told a Congressional committee last month – enough evidence to produce more upbeat statements, such as this, but not enough to reverse the Fed’s decision to purchase an additional $600 billion in government bonds to boost the speed and strength of the recovery.

It appears that financial institutions are not “going gentle” into the night.  They are railing big time against the darkness descending on the industry in the form of new regulations that threaten to slash the income from credit cards and overdraft fees. 

It looks like a stalemate – again - on regulatory reform, as another effort to craft a bipartisan agreement on a Senate bill appears to have crashed and burned.