Gross Says Jobs Gains Not Enough for Growth: Tom Keene

Pacific Investment Management Co.’s Bill Gross said job gains in September aren’t enough to sustain growth in the U.S. economy and that neither political party understands what’s needed to boost employment.

The economy needs 200,000 to 250,000 new jobs per month to expand, Gross, manager of the world’s biggest bond fund, said in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. Global investors like Mitt Romney better than any other U.S. presidential candidate, while remaining cool to the Republican field in general, according to a Bloomberg poll.

“I don’t think Barack Obama has been very good for the economy and I don’t think Mitt Romney would be either; neither camp recognized the problem in terms of job creation,” Gross said. “We need to, yes, to have currency revaluations, which the Republicans are opposing. We need in some cases penalties, tariffs where applicable. We need a buy-American, produce- America type of policy in order to create jobs.”

Payrolls climbed by 103,000 workers after a revised 57,000 increase the prior month that was more than originally estimated, Labor Department data showed today in Washington. The median forecast in a Bloomberg News survey called for a rise of 60,000. The gain reflected the return to work of 45,000 telecommunications employees. The jobless rate held at 9.1 percent.

Photographer: Scott Eells/Bloomberg

Pacific Investment Management Co.’s Bill Gross. Close

Pacific Investment Management Co.’s Bill Gross.

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Photographer: Scott Eells/Bloomberg

Pacific Investment Management Co.’s Bill Gross.

‘Screams Decent’

“This report screams decent, it doesn’t scream pretty good,” said Gross, who serves of co-chief investment officer with Mohamed A. El-Erian at Pimco.

The U.S. needs to simultaneously address housing, the labor market, infrastructure and credit for companies, El-Erian, who is Pimco’s chief executive officer, said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu.

“We have lots of small- and medium-sized businesses that can’t get credit today because the banks aren’t lending,” El- Erian said. “We are like deer stuck in headlights thinking that there’s some magical solution. There isn’t. This is hard work across a whole range of issues.”

Among U.S. investors, former Massachusetts governor Romney does much better than President Barack Obama, with 69 percent favoring him on the economy versus 16 percent for the president, according to a Sept. 26 Bloomberg Global Poll. All the other candidates are in single-digits.

Safe Sovereigns

Pimco favors bonds of the U.S., U.K., Germany, Australia and Canada amid slow growth in developed economies, Gross reiterated. European leaders are under pressure from their global counterparts to find a solution to their debt crisis that has caused financial turmoil and threatens to tip the world economy into recession.

“These are countries that can survive a global recession if it comes to that,” said Gross, the founder of Newport Beach, California-based Pimco.

Romney, who will face off against the other Republicans in an Oct. 11 Dartmouth College debate sponsored by Bloomberg News and the Washington Post, is seen less favorably overseas, according to the quarterly poll, which covered 1,031 investors, traders and analysts who are Bloomberg subscribers.

After eliminating Treasuries from his $242 billion Total Return Fund in February because they were too expensive, Gross increased his holdings in U.S. government securities to 16 percent as the debt posted the highest quarterly returns in almost three years. Treasuries gained 6.4 percent in the third quarter as investors sought refuge amid slowing growth and Europe’s sovereign-debt crisis, Bank of America Merrill Lynch indexes show.

The Total Return Fund has lost 0.4 percent in the past year, lagging behind 91 percent of its peers, according to data compiled by Bloomberg. Over the past five years, the fund has returned 7.7 percent on average, topping 97 percent of rival funds.

To contact the reporter on this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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