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Comments on Economy, Inflation

Lakshman Achuthan, managing director at Economic Cycle Research Institute, comments on the U.S. job market trend, inflationary pressures, and the Federal Reserve policy on interest rates. He spoke from New York in an interview before the Labor Department released its July employment data today.

On job market trend: "It seems as though the trend has been shifting to the downside. Certainly the goal posts have been moved" as economists are forecasting fewer job creations. "Looking at the leading indicators of employment, there's a cycle there. It certainly looks like the best news on jobs growth is behind us at this point."

"It's not that we're not creating jobs, it's not that the sky is falling or that the economy is stalled out here. But some of the stronger part of the cycle is behind us. We're in a bit of an easing pattern here in terms of overall growth, and jobs are going to be affected."

On his analysis of the future inflation gauge: "We see that it peaked out back in October. It's still elevated, which is notable. But it had a little bit of a drift downward. And then in the last few months, we saw that it may be popping to an upside."

"If it continues easing downwards, it's very good news for the Fed. Basically that would mean that underlying inflationary pressures are easing. And the Fed has been talking about how you have to look at forward-looking inflation measures as opposed to coincident measures such as the jobs report. But if it pops up to the upside, the forward-looking numbers would be a little tougher to digest."