Need more "good" job data to cut unemployment: Pimco

By Jennifer Ablan

NEW YORK (BestGrowthStock) – The U.S. jobs report is “good overall,” but the markets will need to see higher numbers for several months to overcome stubbornly elevated unemployment, Mohamed El-Erian, the co-chief investment officer of PIMCO, said on Friday.

After months of painful losses, the economy added 151,000 jobs in October, the first increase since May, exceeding all estimates in a Reuters survey of economists, Labor Department figures showed on Friday. A 159,000-jump in private employment more than offset a 8,000 drop in government payrolls.

El-Erian, who helps oversee more than $1.1 trillion at Pacific Investment Management Company, said in an e-mail to Reuters: “We need to see this (figure) and higher numbers for several months to overcome the critical issue of stubbornly high unemployment that is becoming increasingly structural in nature.”

The Labor Department data showed the unemployment rate remained at 9.6 percent for a third straight month, despite the surge in job gains.

It also revised payrolls for August and September to show 110,000 fewer jobs were lost. Economists had expected payrolls to increase 60,000 last month, with private employment rising 75,000.

El-Erian said Friday’s U.S. jobs report will help bolster so-called risk markets and push oil higher. But he added: “The longer term impact will depend on the strength of the all-important handoff to permanent sources of employment growth.”

President Barack Obama called the latest U.S. unemployment figures “encouraging news” but said there was still much more work to be done to boost job creation.

(Editing by Theodore d’Afflisio and W Simon )

Need more "good" job data to cut unemployment: Pimco