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Economy, Jobs & Inflation


Oct. 6 (Bloomberg) -- Lakshman Achuthan, managing director at Economic Cycle Research Institute in New York, comments on the current job market environment and his outlook for inflation and the Federal Reserve policy. He spoke in an interview before the Labor Department released its September employment data today.


On job-market environment:


"People, I think rightly so, are getting used to the idea of more subdued job growth. Employment indicators have pointed to slower and slower job growth as a result of the economic downturn. But the important thing is that they haven't plunged the way they plunged in front of the last two recessions."


"It's not good news that jobs are slowing, but on the other hand, we don't have the sky falling just yet."


On his analysis of the gauge of future inflation:


"So far, when we're looking at this number, it is very consistent with what the Fed has been saying and what they've been doing. We had this upturn in inflation, and a leveling-off in the future inflation gauge through the August reading on the monthly numbers, and that's what we have so far."


On Fed policy:


"It doesn't look like they have overdone it. We do not have a recession forecast here. But we are more vulnerable to a negative shock."


In the case of past recessions, "the future inflation gauge plunged, giving them room to do a preemptive easing to stave off recession. That is not there just yet, but that is why the inflation gauge is important to watch."