Jobs Recovery May Be Premature

SUSIE GHARIB: Investors are waiting eagerly for Friday`s report on the job
market. Many economists expect to see job gains in the January employment
report, but tonight`s commentator says there are too many outliers to call
it a true jobs recovery. He`s Bernard Baumohl, chief global economist at
the Economic Outlook Group.

BERNARD BAUMOHL, CHIEF GLOBAL ECONOMIST, THE ECONOMIC OUTLOOK GROUP:
Later this week, we get to see if the recent improvement in the job market
has continued into the New Year. Many analysts believe labor market
conditions finally turned the corner, now that the economy appears to be on
a stronger footing. While the job numbers have looked better lately, to say
it has turned the corner, I believe, is way premature. That`s because the
concerns that kept employers from ramping up hiring last year are still
with us today.

For example, it is true consumers spent more freely during the holiday
season. But that shopping has been financed largely out of savings and more
debt and that is not a healthy foundation for future spending. Moreover
the partisan food fight in Washington shows no sign of ending, making
future tax and regulatory policies totally inscrutable and that will delay
business investments.

More ominous are the prospects of a European sovereign debt default
which could trigger another global financial meltdown or that a clash with
Iran will catapult energy prices to levels that can choke off economic
activity. This is not the kind of backdrop that emboldens employers to
accelerate hiring. For the job market to truly turn around, there needs to
be more clarity from Washington on tax, regulatory and spending policies
and a faster resolution of the crises in Europe and with Iran. I`m Bernard
Baumohl.


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