Federal Reservations

WASHINGTON (Reuters) - Growth slowed in some U.S. regions during May as costlier food and energy as well as supply disruptions stemming from Japan's earthquake took a toll, the Federal Reserve said on Wednesday.

Originally from Reuters: Business News

The FOMC finished its interest rate meeting and held rates steady as expected. This follows up from our post earlier today previewing the FOMC rate decision.
The focus was on how the Fed assessed the economic recovery, what its saw in regards to inflation, and what clues today’s statement had in regards to exit strategy.
A Shift in Inflation
The Fed shifted its view on inflation modestly in today’s statement. While underlying inflation remains low, the Fed added extra concern about rising … [visit site to read more] or compare Best Credit Cards and Best CD Rates

Originally from DailyMarkets.com

Tomorrow the BLS will release the February Employment Situation Summary at 8:30 AM ET. The consensus is for an increase of 179,000 payroll jobs in February, and for the unemployment rate to increase slightly to 9.1% (from 9.0% in January).

Two quick comments and then a review of recent data:
• Remember that the weak payroll report in January (only 36,000 jobs added) was blamed on the snow. Usually I don't buy the weather excuse, but it did appear weather played a role this time. If there is a bounce back, it will be useful to average the last two months together to estimate the current pace of payroll growth. If there is no bounce back - that would definitely be bad news.

• Even if the payroll report shows improvement, the employment situation remains grim. There are 7.7 million fewer payroll jobs now than before the recession started in 2007 with almost 14 million Americans currently unemployed. Another 8.4 million are working part time for economic reasons, and about 4 million more workers have left the labor force. Of those unemployed, 6.2 million have been unemployed for six months or more.

So, while the report tomorrow will hopefully suggest “improvement”, many of the unemployed and marginally employed will not see it, at least not yet, and probably not for some time.

Here is a look at a few of the recent employment related reports:

• The ISM non-manufacturing (service) employment index increased to 55.6 in February, up from 54.5 in January.

Click on graph for larger image in graph gallery.

This graph shows the relationship between the ISM non-manufacturing employment index and the change in BLS private service employment (as a percent of the previous month employment).

There is plenty of noise (R-squared is 0.68), but a reading of 55.6 suggests a fairly strong increase in service sector employment (blue dot on graph). This is about a 0.23% increase or around 200,000 service sector jobs.

• The ISM manufacturing employment index increased to 64.5 in February, up from 61.7 in January. This was the highest level since January 1973, however manufacturing employment is a much smaller percentage of overall U.S. employment now - so the impact on overall employment is less.

This graph shows the relationship between the ISM manufacturing employment index and the change in BLS manufacturing employment (as a percent of the previous month employment).

The two yellow dots are for January 2011 (61.7 ISM and 49,000 jobs), and a forecast for February based on the ISM employment reading of 64.5. The ISM survey suggests manufacturing employment grew close to 60,000 in February.

• ADP reported Private Employment increased by 217,000 from January to February on a seasonally adjusted basis, and has averaged 217,000 over the last three months.

• Weekly initial unemployment claims were down significantly in February.

This graph shows the 4-week moving average of weekly claims for the last 40 years.

The average in February was 388,500 initial claims per week, down sharply from the October average of 456,000.

• All of the Regional Fed manufacturing surveys reported employment expansion in February.

• The Federal Reserve’s “Beige Book” reported that "Labor market conditions continued to strengthen modestly, with all Districts reporting some degree of improvement."

• Consumer Sentiment increased in February (frequently coincident with improvements in the labor market). The final February Reuters / University of Michigan consumer sentiment index increased to 77.5, the highest level in three years.

• However on unemployment: Gallup Finds U.S. Unemployment Hitting 10.3% in February NOTE: The Gallup poll results are Not Seasonally Adjusted (NSA), so use with caution. But this does suggest a much larger increase in the unemployment rate than the consensus.

My guess is we see the opposite of January when payroll employment was weak, but the unemployment rate dropped sharply. I expect payroll employment was up sharply in February, but the unemployment rate probably increased too.

Originally from Calculated Risk

Some Federal Reserve officials last month raised the possibility of scaling back the Fed's $600 billion Treasury bond purchase program, according to the minutes of the latest Fed meeting.

Originally from All News, Video and Posts related to TOPIC: Federal Reserve

WASHINGTON (MarketWatch) - Some members of the Federal Reserve's Open Market Committee told colleagues at their December meeting that they "had a fairly high threshold" for making changes to its $600 billion bond-buying program. At the meeting, Fed members did see signs that the economic outlook was improving but generally decided that the better outlook was not sufficient to make any adjustments to the bond buying plan. Some FOMC members noted that they needed more time before they would consider any changes. The Fed has set out a plan to purchase the bonds through June, a pace of $75 billion per month. Officials said there were several reasons why bond yields had risen since the Fed started its bond plan and that the purchases had helped keep yields lower that would otherwise be the case.

Originally from MarketWatch

Has the Federal Reserve become the Central Bank of the World?  That is what some members of Congress are asking after the Federal Reserve revealed the details of 21,000 transactions stretching from December 2007 to July 2010 that totaled more than $3 trillion on Wednesday.  Most of these transactions involved giant loans that were nearly interest-free from the Federal Reserve to some of the largest banks, financial institutions and corporations all over the world.  In fact, it turns … [visit site to read more] or compare Best Credit Cards and Best CD Rates

Originally from DailyMarkets.com

It would seem that the Federal Reserve has few fans these days. Fed Chairman Bernanke is castigated in blogs. Members of Congress are questioning his strategies. Finance Ministers in Germany call him “clueless”. His QE2 tactic has prompted near universal scorn from economists throughout the world. Einstein taught us that everything is relative. Depending up one’s point of view, maybe it’s time to give Bernanke and the Fed some love.

Originally from The Market Oracle

The Fed's latest "quantitative easing" program is designed to bring down interest rates, but some are moving up instead. Rates have risen lately as investors avoid U.S. government debt

Originally from WSJ.com: Economy

The Fed's latest "quantitative easing" program is designed to bring down interest rates, but some are moving up instead. Rates have risen lately as investors avoid U.S. government debt

Originally from WSJ.com: Economy

The Fed's latest "quantitative easing" program is designed to bring down interest rates, but some are moving up instead. Rates have risen lately as investors avoid U.S. government debt

Originally from WSJ.com: Economy