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Economy Is Firming, No Rate Cuts

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

On the job market: "Looking at leading indicators in the manufacturing sector, and even some coincident indicators recently, there are signs that sector is bottoming. So if manufacturing jobs start being added on top of the healthy service sector, we should have a rebound in jobs growth."

On Fed policy on interest rates:"Eventually the Fed will cut. But in terms of our forecast horizon, which is a few quarters, at least through the end of this year, we don't see that."

"The basic reason is even though we don't see inflation running away, the leading indicators of the economy are moving to new highs. This economy is firming; it is not weakening. And that's the reason the Fed is not compelled to cut."