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San Francisco Fed's Daly: Too soon to say job market 'stalling'

EconomyOct 10, 2021 12:00PM ET
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© Reuters. FILE PHOTO: San Francisco Federal Reserve Bank President Mary Daly poses at the bank’s headquarters in San Francisco, California, U.S., July 16, 2019. REUTERS/Ann Saphir/File Photo/File Photo

(Reuters) -The U.S. job market will continue to feel the effects of COVID-19, but it is too soon to say it is "stalling," San Francisco Federal Reserve President Mary Daly said on Sunday.

"It's going to have these ups and downs, especially with the Delta variant," Daly said on the CBS weekend news program "Face the Nation" when asked about a second straight month of disappointing job growth in September.

"So I think it's too soon to say it's stalling, but certainly we're seeing the pain of COVID and the pain of the Delta variant impact the labor market," she said.

Daly's comments came after the Labor Department on Friday reported that just 194,000 new jobs were created last month, fewer than half the number expected by economists in a Reuters poll. While the unemployment rate dropped to an 18-month low of 4.8%, it was partly a factor of people leaving the U.S. workforce.

Coupled with an equally disappointing employment report card for August, the recent data has raised concerns that the U.S. economy will take longer than expected to recoup the remaining 5 million jobs lost to the coronovirus pandemic, and that factors like high inflation, souring consumer sentiment and the persistence of COVID-19 will sap growth.

Daly said she had always thought the Delta variant of the coronavirus would create headwinds for the economy, but she does not expect it to trigger a recession.

"I always expected Delta to take a toll, just not put us into another recession, and we're seeing that toll," she said. "We're seeing this disrupt families, disrupt schooling, disrupt people's ability to get to work and feel safe about it."

"Delta has taken a toll, but it hasn't yet derailed us," Daly said. "As goes COVID, so goes the economy."

Asked about inflation, Daly said the price pressures U.S. consumers are facing are "painful" but are directly related to COVID-19 and are not expected to persist. That echoes her previous and many other Fed officials' assessments that the current bout of high inflation is "transitory" even if it has extended further than most policymakers had initially expected.

"Everyone's feeling the rising prices for energy, food, basic services, and that's painful because we aren't used to seeing it," Daly said. "It's eye-popping in some categories."

"We have these really anxious-to-get-out-there-and-spend consumers hitting the wall of supply constraints, and of course the prices are going to rise," Daly said. "But I don't see this as a long-term phenomenon."

Daly and other Fed officials are engaged in discussion over when and how to start removing the extraordinary support they have provided for the economy during the pandemic. Even with Friday's soft payrolls report, Fed officials are still expected to press ahead with the first stage of that withdrawal as early as their next meeting in early November.

San Francisco Fed's Daly: Too soon to say job market 'stalling'
 

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Comments (10)
ZS Beck
ZS Beck Oct 10, 2021 4:47PM ET
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I agree, let's wait until everything crash, and will be no more inflation.
Millennial Metals
Millennial Metals Oct 10, 2021 3:51PM ET
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The USA is on the verge of a hyperinflationary collapse
Todd Gray
Todd Gray Oct 10, 2021 2:38PM ET
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Imo, if the US government was wise, they'd do what Norway's done; square up to the people, and say be responsible, but let's get on with our lives. On the other hand, if the people stopped social distancing, I suppose it's possible we'd find out not a lot bad happens, and it's been overhyped. The media is mostly running with case count headlines, not death rates. We know masks help very little. We know covid's in the air we breath in every store we enter. We know it falls to the ground, gets on our shoes, and is tracked onto our cars and homes. We know natural immunity is 7x more affective than vaccine immunity. There's no escaping it, and it's here to stay. Why? Because, not once has science ever gotten rid of a virus. They've eradicated some diseases, like polio & mumps. But, never a virus. It's also amazing after, what, 19 months now, there still seems to be a shortage of ventilators. They aren't hard to build, and don't cost very much. Plenty of people would do the work.
Tyrone Jackson
Tyrone Jackson Oct 10, 2021 2:05PM ET
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The jobs market is frozen , not stalled. Unless you count retail a job. The 100k jobs are gone. The 40-50 Year olds that made 100k are not getting that job back. Add in skyrocketing inflation and the companies are putting a freeze on hiring. Going Fromm 100k a year to a supermarket clerk is a reality check. Most will just sit home and collect the dole. Biden’s great welfare scheme.
Benjamin McIntire
Benjamin McIntire Oct 10, 2021 2:05PM ET
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Cute fantasy.
Ricardo Diogo
Rcd72 Oct 10, 2021 1:26PM ET
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there is a side effect of COVID! it has removed the brains from FED members.
New Jazenevd
New Jazenevd Oct 10, 2021 1:26PM ET
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Brains are impediment to money-printing jobs.
Ricardo Diogo
Rcd72 Oct 10, 2021 1:25PM ET
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maybe it is better to speak on the galloping inflation and spot nonsense on jobs.the inflation is destroying the economy world wide.
William Bailey
William Bailey Oct 10, 2021 12:28PM ET
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The Fed credit creation itself is the cause of the markets stalling … inflation is *******jobs
New Jazenevd
New Jazenevd Oct 10, 2021 12:23PM ET
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Fed uses “job market” as an excuse to accommodate destruction of US economy.
michael engel
michael engel Oct 10, 2021 12:16PM ET
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Columbus was Crypto.
David Paitsel
David Paitsel Oct 10, 2021 11:33AM ET
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Everyome who wants a job already has one. Unemployment is now at 4.8 percent and there are thousands of open jobs. Many who worked before now find they get 400 or 500 hundred a month tax free from the child tax credit, why would they go back to work when they make the same amount as before tonstay home?
Roman Sheveloff
Roman Sheveloff Oct 10, 2021 11:33AM ET
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Actually it's 5.2% but is counting.
Bhuv Ar
Bhuv Ar Oct 10, 2021 11:33AM ET
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Roman Sheveloff  What I don't understand is, with just 194k jobs added, how did it fall from 5.2% to 4.8%.. is 200k jobs equal to 0.4% of the working population? With that calculations. 500k = 1%, 50Mil=100% of the work force? are there only 50Mil working individuals in US? there is something totally bogus in their calculation to be honest.
 
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