"The job market appears to have softened in recent months. Fiscal austerity has begun to take a toll on job creation. The run-up in interest rates may also be doing some damage to jobs in the financial services industry."
- Mark Zandi, chief economist at Moody's Analytics
Another worrying sing for the world's largest economy emerged on Wednesday, as report from the ADP Research Institute showed the economy created less than expected jobs, indicating labour market is struggling to build up steam. There were only 166,000 new working places, after a 159,000 gain a month earlier; however, the figure is significantly lower from the consensus estimate of 180,000. In case the tendency persists in the coming months, it is unlikely Bernanke will consider tapering its stimulus programme, as faster progress in hiring and strong growth in wage is vital to sustain improvement in consumer spending, which is the biggest part of the economy.
While the White House is still struggling to reach any compromise over the budget, government shutdown's impact is spreading into all sectors of the economy. Hence, it is likely to slow approval of thousands of mortgages, threatening to affect the overall housing market and broader economic improvement. Until the government is not functioning at its full capacity, borrowers in the process of obtaining a loan would be delayed as lenders are blocked from both verifying Social Security numbers and accessing tax transcripts Internal Revenue Service.
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