Money in the Morning

JOBS DATA WORSE THAN EXPECTED -- Private non-farm jobs unexpectedly shrank in September, according to the latest ADP report. Economists were expecting a gain of 20,000 jobs, but the unofficial report suggests 39,000 jobs were lost.

The September jobs report that matters most is due out Friday from the Labor Department.

More bad news... IMF downgrades 2011 growth projections. U.S. GDP increase cut from 2.9 percent to 2.3 percent. World GDP from 4.8 to 4.2. China from 10.5 to 9.6.

And... Nouriel "Dr. Doom" Roubini ups the odds for a double-dip recession to 40 percent. All it would take is another external shock, which could come in the form of a fiscal crisis in Spain, the economist says.

Why the short-term data doesn't matter: The economy is sure to be sluggish at best, meaning that people are sure to feel the pain, says CalculatedRisk.

Why the short-term data matters: Poor economic reports mean the Fed is more likely to act at its November meeting, says Reuters.

BUT WILL MORE STIMULUS HELP? -- With the Fed having already injected $1.7 trillion into the economy through monetary stimulus in addition to the roughly $1 trillion in fiscal stimulus from the Obama administration, economists are questioning the impact of more monetary action alone..

IMF Chief Economist Olivier Blanchard: "I think we may see a bit more quantitative easing in the U.S. and in Europe but I don't think we should fool ourselves. We have used most of the monetary ammunition we have." Blanchard calls for "fiscal consolidation," which the U.S. is reluctant to do right now, and currency appreciation in emerging countries, which the U.S. is pressing China on. CNBC:

Treasury Secretary Geithner made the pitch for currency reforms Wednesday. The money quote: “Over time, more and more countries face stronger pressure to lean against the market forces pushing up the value of their currencies. ... The collective impact of this behavior risks either causing inflation and asset bubbles in emerging economies, or else depressing consumption growth and intensifying short-term distortions in favor of exports.” NYT:

FT columnist Martin Wolf is on board with yuan revaluation, but he cautions against starting a trade war.

The yuan's value will be the hot topic at this weekend's annual meeting of the IMF and World Bank in Washington.

Paul Krugman says that monetary stimulus probably won't do the job by itself, which means that the fiscal stimulus Washington is shying away from is still needed. "Of course, at this point, with the loss of political will, it looks as if we’re going to see an attempt to do the trick with quantitative easing alone. I hope it works, but I wouldn’t bet on it."

Former Reagan WH budget chief David Stockman says the next move on the economy should be fiscal austerity, dismissing an extension of the Bush tax cuts, more stimulus, the White House fiscal commission, Ben Bernanke, the Obama presidency, Republicans and Democrats.

WH CEA Chairman Austan Goolsbee dismisses argument that budget cuts will spur economy growth. He's optimistic over personal consumption growth. Ezra Klein:

Tech execs tell White House to use IT to cut deficit. Reuters:

Felix Salmon sees Bloomberg's move into consumer news paying off in more terminals sold.

HOUSING -- Justice to look into foreclosure practices after Pelosi, Calif. Dems letter.

Meanwhile, the president is sitting on a bill that would make it harder to challenge foreclosure decisions. The bill, sponsored by Rep. Robert Aderholt (R-Ala.), passed quietly through the Senate on a unanimous consent request.

Sen. Wyden wants tax reform in lame duck: The Oregon Dem says the post-election session shouldn't focus on the Bush tax cuts. Instead, he's pushing for an overhaul of the tax code, which won't happen by passing either the full extension pushed by Republicans or partial extension pushed by the White House.