This Time, Fed Tightening Shouldn't Make You Tense

摘要

It seems odd that just when the job market breaks out of its doldrums, worries over the economy's future begin to weigh on investors' psyches. After all, strong growth in payrolls has always been regarded as the final and most crucial element in a lasting recovery. But this is one of those times when good news on the economy is seen as bad news for the financial markets, since it means the Federal Reserve will begin lining interest rates faster than the markets expected (page 36). Of course, even the most somber of economic forecasts for 2004 had implied some pickup in job growth. What has been so surprising is how fast the job market is mending: 288,000 new positions in April, after 337,000 in March, bringing the total job gains since payrolls began to turn around last August to 1.1 million. In only eight months, that's 41% of the 2.7 million jobs lost during the previous 21/2 years.