Right Hooks

With Economy Running as Expected, Will Rates Rise?

215,000 jobs in July and the unemployment rate remained at 5.3%.

Dan Gilmore · Aug. 7, 2015

Welcome to the new normal. Just as The Wall Street Journal predicted, the U.S. added 215,000 jobs in July and the unemployment rate remained at 5.3%. For the last few months, the economy has been plodding along, adding 200,000 or so jobs every month, and if you were to tally the words used in the Bureau of Labor Statistics’ press releases, “unchanged” would rank high. The labor force participation rate sits at 62.6% — with a record 93,770,000 Americans not working. The great machine of the American economy still has not begun to roar after the 2008 crash. Yet to the Federal Reserve Bank, there may be some encouraging numbers, enough for them to possibly pull the lever and raise interest rates in the coming months. According to BLS’s July jobs report, the U-6 measure of unemployment edged down 0.1 percentage point to 10.4% — a number well above pre-recession levels. Wages, an economic indicator lagging for months despite job growth, increased 5 cents to a $24.99 hourly wage for the average American worker. Furthermore, BLS revised upward the jobs numbers for May and June, saying there were an additional 14,000 jobs added in those two months. This may be enough for the Fed to decide that it’s time raise interest rates. Fed Chairwoman Janet Yellen has news conferences scheduled for Sept. 12, Dec. 16 and March 16. Look for “unchanged” to change.

Federal Reserve Bank of Chicago | Photo courtesy TonyTheTiger, Wikimedia Commons

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