Jeremy Hobson: There’s been a lot of central bank action around the world this morning. Central banks in Europe and China both cut interest rates in an effort to spur lending, and the Bank of England announced a new round of economic stimulus.
Gus Faucher is senior economist with PNC Financial Services Group, he’s with us live this morning from Philadelphia. Good morning.
Gus Faucher: Good morning.
Hobson: Well Gus, what do you make of this new round of global monetary stimulus?
Faucher: Well I think it’s good news for the global economy and the U.S. economy. Central banks are taking efforts to keep interest rates low and to start to get growth restarted in Europe and make sure that growth re-accelerates in China.
Hobson: Well and they’ve been doing this for a while, central banks, taking this kind of coordinated action every now and again. I am wondering whether it’s having any impact on jobs. We’ve had a couple reports this morning — private reports — about the job market. They look pretty good. What do you make of that — ahead of tomorrow’s big Labor Department report?
Faucher: Well, we’ve certainly gotten good news on the U.S. job market today. The ADP report showed net job growth in the private sector of about 176,000. We saw unemployment insurance claims fall sharply in June. So that’s an indication that we should have stronger job growth in June in the U.S., and it should pick up from the disappointing May.
Hobson: Do you think that’s because we are being propped up — if you will — by central banks, or is it standing up on its own?
Faucher: No, I think the economy is getting better. The fundamentals of the U.S. economy are looking better. And then I think it certainly is helpful that central banks around the globe, including the Federal Reserve, are taking efforts to support growth. But we’re working out imbalances that existed in the U.S. economy and that’s leading to better jobs gains.
Hobson: Gus Faucher, senior economist with PNC Financial Services Group, thanks so much.
Faucher: Thank you.
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