AS THE American recovery accelerates, its central bankers are getting itchy fingers. Interest rates have not moved from their rock bottom 0.25% since the beginning of 2009, and a rise is nearing. July’s employment report, out today, revealed an economy that was not quite as buoyant as markets expected. But it was probably not bad enough to make the central bankers postpone the rate hike.
The economy churned out 215,000 extra jobs in July, not as many as the 225,000 expected, nor the 246,000 average over the previous 12 months. But it is still respectable. Unemployment stayed put at 5.3%, tantalisingly close to the 5-5.2% range that the Federal Reserve has labelled as “full employment”. Average wages rose by 5 cents per hour (0.2%), in line with expectations, and by 2.1% relative to the same month last year. Presidential candidates are falling over themselves to present their ideas for how to boost wage growth, and this month's sluggish performance marks no...Continue reading
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