Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Fed’s Rosengren Says Jobs Slowdown Signals Further U.S. Weakness

July 9 (Bloomberg) -- Federal Reserve Bank of Boston President Eric Rosengren said a struggling U.S. labor market threatens to slow household spending as Europe’s fiscal crisis adds to uncertainty that’s restraining hiring and investment.

“The slowdown in employment growth not only hinders our ability to get to full employment, but also weakens the consumer side of the economy even more, going forward,” Rosengren said in the text of remarks given in Bangkok today. “This suggests a self-fulfilling dynamic at work as concern over a potentially significant slowdown in the future reduces current growth.”

Europe’s sovereign debt crisis along with slower U.S. job growth encouraged Fed officials last month to expand a program to lower longer-term interest rates and signal that they’re prepared to do even more. A Labor Department report that showed employers added fewer workers than forecast was among data last week indicating the economic recovery is showing signs of strain.

With Europe’s debt and banking problems weighing on the outlook, “slow growth is likely to continue for quite some time,” Rosengren said at the Sasin Bangkok Forum today. “Just in the past three months employment growth in the U.S. has slowed fairly noticeably.”

Employers added 80,000 workers in June and the unemployment rate held at 8.2 percent, the Labor Department reported July 6. Economists projected a 100,000 rise, according to the median estimate in a Bloomberg News survey. The 84,000 gain in private employment, which excludes government agencies, was the weakest in 10 months.

Fed Forecast

Fed officials lowered their forecast for growth and employment after meeting on June 19-20, projecting a jobless rate of at least 7.5 percent by the end of 2013. Chairman Ben S. Bernanke said after the meeting that additional asset purchases are among the steps the Fed would consider.

Rosengren said today that economies across the globe are facing similar difficulties, with Europe on the verge of recession and China experiencing a growth slowdown.

“My discussions with bankers, exporters, and business managers indicate more restraint by firms in investing in capital, and in hiring employees, as the firms wait for some of the economic uncertainty to be resolved,” Rosengren said.

A more interconnected global banking system means that a “serious financial shock” in Europe could have a “large impact” on banking shares and the broader U.S. stock market, he said.

“Such stock price declines could impact households and businesses on both sides of the Atlantic, and problems in Europe could potentially cause a more significant retrenchment by European financial institutions operating in the United States,” Rosengren said. “Given global employment and fiscal challenges, the global economy remains quite vulnerable to financial shocks.”

Rosengren, 55, was formerly the head of banking supervision and regulation at the Boston Fed and became its president in 2007. Fed presidents rotate voting on monetary policy, with Rosengren next holding a seat in 2013.

To contact the reporter on this story: Aki Ito in San Francisco at

To contact the editor responsible for this story: Christopher Wellisz at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.