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Payrolls Theres More Rate Cuts Coming

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by Felix Salmon
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Feb 01 2008 12:00am EDT

Payrolls: There's More Rate Cuts Coming

I got a sad email from a friend at Morgan Stanley yesterday, talking of the hundreds of employees who were "marched out of the building" at 9:15 in the morning, part (one assumes) of the previously-announced headcount reduction.

Morgan Stanley, it seems, is not alone: for the first time since 2003, the monthly payrolls report has turned negative. It's not all bad news: unemployment fell, and November and December were revised upwards. But given that the Federal Reserve is explicitly charged with maximizing employment, this report surely makes further rate cuts much, much easier - especially as wage inflation seems to have fallen to zero (or 0.2%, to be precise).

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