Washington has really done it now.
A strong first half had initially signaled a good year for Wall Street, but recent political and market events will likely drive profitability and compensation lower, according to a report released by New York state Comptroller Thomas DiNapoli.
Profits could total about $5 billion in the second half after generating an estimated $10 billion in the first half, the report said….
"Washington's inability to resolve budget and fiscal issues is bad for business," Mr. DiNapoli said in a statement. "Failure to resolve the federal budget and debt ceiling impasse could disrupt the economy and hurt New York City and New York state…."
The report also found that total compensation among the firms increased 5.5% in the first half, but that "recent developments have cast doubt" on the prospect of bonuses being higher this year than last. The average salary, which includes bonuses, for securities-industry employees in New York City was $360,700 in 2012, relatively stable from 2011's figure of $362,950. Compensation in 2012 was higher than in any year before 2007.
In other shutdown-related news, the jobs report we've waited an extra two-and-a-half weeks for is finally here, and it's spectacularly uninteresting.
American employers added 148,000 jobs in September, a discouraging report that may still be too optimistic about the job market.
The report from the Labor Department is based on data collected before the recent government shutdown even started, so it doesn’t factor in the resulting furloughs. Adding to the uncertainty, the coming data releases will be delayed and distorted by the temporary shutdown, making it difficult to get an accurate picture of the underlying health of the economy.
Weakness in the September hiring figures — coupled with the complications about the upcoming releases — is expected to further delay the Federal Reserve’s decision to start tapering its stimulus programs.