by Calculated Risk on 10/22/2013 07:44:00 PM

From Catherine Rampell at the NY Times: Weak Job Data May Weigh on Fed’s Decision on Stimulus

Weakness in the September hiring figures — coupled with the complications about the upcoming releases — is expected to further delay the Federal Reserve’s decision to start tapering its stimulus programs.

“The labor market lost, rather than gained, momentum over the summer, leaving us with less than a desirable cushion just as the government was shuttered in response to political shenanigans,” said Diane Swonk, chief economist at Mesirow Financial.

While the Fed has been trying to stimulate the economy, fiscal policy has largely worked in the opposite direction, with multiple drags on growth resulting from a payroll tax hike that began in January, the across-the-board budget cuts of the so-called sequestration that began in March, and then the partial government shutdown and debt ceiling crisis in October. Even before the shutdown, the federal government had the lowest number of civilian employees on its payrolls since 1966, according to the September jobs report.

It will be a few months until the data is back to normal.

Wednesday:
• At 7:00 AM ET, the Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 9:00 AM, the FHFA House Price Index for August 2013. This was original a GSE only repeat sales, however there is also an expanded index that deserves more attention. The consensus is for a 0.8% increase.

• During the day: The AIA's Architecture Billings Index for September (a leading indicator for commercial real estate).