A weak August jobs report signaled hiring continues to slog along at a snail’s pace, giving the Federal Reserve even more reason to enact more stimulative measures — possibly as soon as next week.
The economy added just 96,000 jobs in August. And even though the unemployment rate dipped to 8.1% from 8.3% in July, any number above 8% is still uncomfortably high for the Fed. (Inflation, on the other hand, is comfortably below the Fed’s target for 2% a year.)
In a speech in Jackson Hole, Wyo. last week, Ben Bernanke characterized the weak job market as a “grave concern” causing “enormous suffering and waste of human talent” — one of the strongest statements yet from the Fed chairman.
Bernanke has defended the Fed’s efforts so far, including two rounds of large-scale asset purchases known as quantitative easing. Options for more easing could include a third round of asset purchases, nicknamed QE3, or extended guidance on low interest rates. The Fed currently forecasts interest rates will remain “exceptionally low” until late 2014.
Earlier this year, the central bank had pledged to provide more stimulus only if the economy weakened further. Recently that language changed to say the Fed “will act” if the economy merely stays the same.
Read more: CNN