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Fed survey flouts labor report, suggests strong market fundamentals

Jul 14, 2012 Sean Albert

The most recent employment report from the Labor Department stirred considerable fears among economists, as it showed a significant slowdown in job creation after several months of steady gains. However, a report released this week by the Federal Reserve suggests the March slowdown may be short-lived, and that wider fundamentals point to sustained growth in coming months. A survey of the Fed's 12 banking districts from mid-February to early April showed strong activity, including hiring, across each branch. "I didn't see any companies say that they're scaling back sharply on hiring because demand is slowing," John Canally, an economist at LPL Financial, told The Associated Press. "The report was generally positive, with widespread optimism about manufacturing and an encouraging outlook for household spending," Dana Saporta, an economist at Credit Suisse, added in a note to clients obtained by The AP. If the Fed report unfolds as projected, it could bode well for consumer credit trends as well, as improved hiring will likely drive an uptick in spending activity and, consequently, demand for debt collection services.