Jobs data reveals insight into future rate decision

by Justin da Rosa04 Sep 2015
It’s the latest key piece of evidence the Fed will consider before making its rate decision later this month, and the optimistic jobs data could influence the central bank to hike the benchmark rate.

Employers added 173,000 jobs in August, dropping the unemployment rate to 5.1%. And although the figure was lower than previous forecast, it comes on the heels strong employment data in June and July.

The jobless rate has also dropped to its lowest point since April 2008.

And that data has at least one Federal Reserve president arguing in favor of putting an end to the record-low rate environment.

“I am not arguing that the economy is perfect, but nor is it on the ropes, requiring zero interest rates to get it back into the ring,” Fed Bank of Richmond President Jeffrey Lacker said, according to Bloomberg. “It’s time to align our monetary policy with the significant progress we have made.”

Still, it is still more likely the Fed will hold off on hiking its rate, according to Ashraf Laidi, a global markets analyst.


  • by Greg | 9/4/2015 11:55:48 AM

    I hope not. The Fed still needs to take into consideration that most people have taken a pay cut in order to go back to work; so the numbers may show more people back to work but those people are working for less money and are just barely getting by. America needs to become a country who manufactures rather then consume products, before we raise interest rates.

  • by Anonymous | 9/4/2015 1:02:32 PM

    I agree with Greg. In addition, many of us in the housing sector have either left the business entirely or have taken significant cuts to our income since the recession. I have clients telling me about having to take a 10% paycut, or whatever the case may be, and I can commiserate because I have taken between a 50% and 75% cut to my income since the market crash. It varies from year to year, but it has never recovered to even half of what I was earning before. But I am employed, so the govt could care less about my circumstances, and when looking through their rose colored glasses all is well. These people are so out of touch with what the rest of us are experiencing and they should not, with good conscience, start raising rates.

  • by Phil | 9/4/2015 1:15:44 PM

    The record low work-force participation rate negates the improvements in unemployment and job creation. Combine that with the Asian Contagion (this time China, not Japan), and there's no way the Fed will rock the boat with a rate increase this month, and very doubtful for December.


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