Will the Fed Opt For More Stimulus as the Economic Recovery Founders?

Weaker-than-expected job growth is fueling speculation that the Federal Open Market Committee (FOMC) will unveil new stimulus measures to prop up the economic recovery when it meets today (Tuesday) for its regular rate-setting session. Friday's July unemployment report was by most measures a disaster, providing the latest indication the economic recovery is running out of steam with 14.6 million Americans still searching for work. The economy shed 131,000 jobs, as 143,000 temporary census workers fell off federal payrolls. Private-sector employment grew by 71,000 in July after a downwardly revised June increase of 31,000 workers. The private sector so far this year has added 90,000 jobs a month on average, well below the 125,000 needed to keep up with population growth - let alone recover the eight million jobs lost during the recession. " It's a double whammy because it causes people to take a psychological step back ," Tig Gilliam, chief executive of staffing firm Adecco Group North America, told The Wall Street Journal . "Now, it looks like not only has the economy slowed, but maybe it wasn't as good when it was originally reported as we thought."