‘Job Growth Likely to Slow’ Pimco’s Crescenzi Tells Bloomberg TV

The Labor Department will release the June jobs figures for the U.S. on Friday.
By Amanda Schiavo ,

NEW YORK (TheStreet) -- The Labor Department will release the June jobs figures for the U.S. on Friday and market watchers will be keeping a close eye on the numbers, as May's jobs figures came in well below analysts' expectations.

Job creation declined in May with the economy adding only 38,000 positions, compared to the 162,000 jobs Wall Street had forecast. Headline unemployment dropped to 4.7% in May.

Pimco portfolio manager Tony Crescenzi appeared on Bloomberg TV's "Bloomberg Go" on Thursday morning to discuss his views on tomorrow's upcoming jobs report.

"It is true that job growth is likely to slow because the jobless rate has fallen to 4.7% and there simply aren't as many people on the sidelines to pull off it," Crescenzi said.

Crescenzi referenced comments by San Francisco Fed president John Williams who said he is hoping job growth slows over the next two years.

"The Fed's own model, the FRB/US model as it's called, the econometric model, projects that job growth will slow to about 150,000 or so in the first half of the year. And it has slowed from the two-twenty or so for the past few years to about one-thirty a month this month...so it is expected and it's actually desirable," Crescenzi continued.

The Fed wants the job growth to remain above labor force growth, which has averaged 70,000 per month, according to Crescenzi.

"To summarize this, as long as job growth stays above labor force growth, 70,000, that will indicate improvement in the labor market because it will mean that more people are being pulled off the sidelines and it'll reduce the jobless rate," Crescenzi said.

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