Disappointing jobs data is driving fresh speculation over whether the Federal Reserve might take extra moves to boost the economy.
If recent reports are an indication that the economy might be losing steam, the central bank could feel compelled to act with another policy move that could boost markets but also expose it and its chairman, Ben Bernanke, to even more political scrutiny.
The Labor Department reported earlier this month that the economy added just 120,000 jobs in March, well below expectations and snapping a three-month streak of strong job gains.
And, on Thursday, data showed the number of people applying for new unemployment benefits had spiked to a two-month high.
While those two reports do not make a trend by themselves, they are driving concerns that the economic recovery could be losing momentum, similar to how early gains in 2011 turned out to be largely a mirage as the year progressed. That worry, in turn, is driving chatter that the Fed could feel compelled to step up to the plate and do more to salvage it.
“The data restarts a lot of discussion about whether or not the Fed needs to be more active,” said Andrew Busch of BMO Capital Markets.