By Ian McKendry

WASHINGTON (MNI) – Despite another month of job growth and a four
tenths downtick in the unemployment rate, market players should still
expect Congress to extend the payroll tax cuts and for the Federal
Reserve to do more quantitative easing in 2012 according to Credit
Suisse Chief Economist Neal Soss.

“There is nothing in today’s numbers that interfere or contradict
QE3, which I think the Fed will implement next year,” Soss said on a
conference call Friday.

“The rate we are adding jobs, it is going to be 2015 before we have
as many jobs as 2008,” Soss added.

Soss said job growth is “not adequate to achieve prosperity over a
quick enough horizon” and that he expects Congress to extend
unemployment benefits and payroll tax cuts.

Soss also said while the unemployment rate fell from 9.0% to 8.6%
he would rather see the unemployment rate increase at least in the
near-term.

“I would prefer to see the unemployment rate going up because
people present themselves for work, because that means they are
regaining confidence to find a job in due course.”

Soss explained that some of the decrease in the unemployment rate
seen in November was partly aided by a 315,000 decrease in the labor
force which is a reflection of people losing confidence in being able to
find a job.

In addition, Soss said a lot of jobs that were added in November
are usually not high paying, such as retail (+49,800) and temporary help
services (+22,300) which would also explain the decrease in hourly
earnings from $23.20 to $23.18.

“You got growth, but it is growth without prosperity,” Soss added.

Soss said the sectors of the economy that are holding back the
labor market and GDP are construction (-12,000), state and local
government (-16,000) and certain parts of the manufacturing sector
(+2,000).

“The rest of the labor market, the rest of the economy is doing
what it always does,”, Soss said, adding “you are at peak rates of
growth in not impaired sectors, so how is that going to speed up?”

“Regretably growth is not fast enough to cure all your problems,”
Soss said, but did add that November’s report was objectivity better.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MAUDS$]