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By Jason Stipp and Robert Johnson, CFA | 09-06-2013 10:30 AM

Johnson: 'Taper' Still on the Table

Despite a lackluster August jobs report and downward revisions to June and July, the Fed is likely to move forward with plans to curb bond buying, says Morningstar's Bob Johnson.

Jason Stipp: I'm Jason Stipp for Morningstar. The economy added a lackluster 169,000 jobs in the month of August, and even worse, July was revised down to show only 104,000 jobs added; that's down from the originally reported 162,000 jobs in July.

Here to offer his take on the report and also the revisions is Morningstar's Bob Johnson, our director of economic analysis.

Thanks for calling in, Bob.

Bob Johnson: Great to be here.

Stipp: That July revision showed one of the worst job gains in the last 12 months, and also we saw June revised down. What's your take on the number of jobs added in August and also these downward revisions for the two prior months?

Johnson: I think that the pattern you see from August and the other months combined is that the employment market is still relatively slow, and the pace really hasn't changed much from the 2% year-over-year growth that we continue to talk about.

Stipp: Are you seeing any softening now? These numbers do look below average for the last 12 months.

Johnson: Absolutely. At the beginning of the year we had several months when we were well over 200,000 jobs added, and now we've had a pretty sustained period where we've had job growth in the mid-150,000s or so. So, we have clearly slowed down a little bit in the monthly numbers looked at independently. But the year-over-year average data is still around the same 2% growth rate.

I think the thing that's interesting with the job growth numbers coming back in here again, they are relatively the same as when the Fed began the last [bond-buying program] program. So, things just really haven't changed all that much

Stipp: 104,000 jobs, Bob, for July. If we had gotten that number, I think it would have had a certain psychological effect if that had been originally reported. What do you think the Fed is going to think when they see a number that low, followed by a lackluster August as well? Do you think that this could curb their willingness to want to go ahead and taper?

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