Productivity, Jobs and the Fed

• Jobless claims declined by 20,000 to 512,000 for the week ended Oct 31, the lowest level since Jan 3. Continuing claims fell by 68,000 to 5,749,000. Some improvement in the employment picture, but still pretty high numbers overall. Tomorrow's employment report should be more enlightening.
• Productivity rose at a 9.5% annual rate last quarter. Naturally, companies are more efficient as they are shedding employees left and right and those left behind are forced to pick up the slack. The hope is that companies will eventually return to hiring once they've squeezed the lifeblood out of their remaining employees.
• Yesterday's decision from the Fed wasn't terribly surprising. The central bank left rates unchanged and promised The Street not to raise them for an "extended period of time" unless they sense inflationary pressures brewing. Although many (World Bank, IMF Nouriel Roubini, just to name a few) are worried about brewing bubbles popping up in asset classes around the world, the Fed has made it clear that it doesn't care about such silly things. After all, the Fed didn't care about the mother of all credit bubbles that inflated between 2005-2007, so why should it start caring now? We have all the rescue vehicles we need in place. We'll just bail everybody out again when we have to, right?
• When I said that the Fed promised The Street it wouldn't raise rates for an extended period of time, I was being very specific. It is a promise to the Street, because Wall Street is benefitting the most from the zero interest rate, quantitative easing, free money bonanza. That is why we keep seeing articles with headlines such as "Goldman Benefits From Trading Bonanza" in the FT today, as well as "Big Bonuses Are Back For Many on Street" from the WSJ.