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WASHINGTON (AP) — Economists have been predicting that the Federal Reserve would raise rates in September -- but now there's speculation that the move will be delayed.
It's because wages are flat, according to the June jobs report. Wages didn't budge, even as employers added 223,000 jobs and the unemployment rate fell from 5.5 percent to 5.3.
The jobless rate fell mainly because many people out of work gave up on their job searches and were no longer counted as unemployed, which may reflect rising discouragement. The figures capture the persistently uneven nature of the job market's recovery from the Great Recession. More people had begun looking for work in May, yet all those gains were reversed in June.
Economist Tara Sinclair of the jobs site Indeed says it would now make sense for the Fed to wait until December to start raising rates. A rate hike would lead to higher rates for mortgages, auto loans and other borrowing.
Some quirks of the jobs report might explain why wages stagnated. The government's survey for the report ended relatively early in the month. So economist John Silvia says it might have excluded some bi-monthly paychecks.
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183-w-35-(Shelley Adler, AP correspondent with Diane Swonk, chief economist, Mesirow Financial)--The Labor Department reports solid hiring for the month of June with 223,000 jobs addded. AP correspondent Shelley Adler reports. (2 Jul 2015)
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161-a-08-(Diane Swonk, chief economist, Mesirow Financial, in AP interview)-"force going forward"-Mesirow Financial chief economist Diane Swonk says one of the reasons the unemployment rate fell to 5.3 percent is becasue the number of teenagers looking for jobs was down considerably. (2 Jul 2015)
<<CUT *161 (07/02/15)££ 00:08 "force going forward"
164-a-11-(Diane Swonk, chief economist, Mesirow Financial, in AP interview)-"that to occur"-Mesirow Financial chief economist Diane Swonk says she thinks it's too early to say whether the Federal Reserve will start raising interest rates in September. (2 Jul 2015)
<<CUT *164 (07/02/15)££ 00:11 "that to occur"
APPHOTO NY111: In this photo taken Tuesday, June 30, 2015, Sophia Lewis, left, with PSEG Long Island, speaks to an attendee about employment opportunities during a job fair at Citi Field in New York. U.S. employers likely hired at another strong pace in June, a sign that the job market is nearing full health and giving the Federal Reserve reason to raise interest rates as early as September. Economists predict that employers added 233,000 jobs and that the unemployment rate dipped to 5.4 percent from 5.5 percent in May, according to data firm FactSet. (AP Photo/Mary Altaffer) (30 Jun 2015)
<<APPHOTO NY111 (06/30/15)££
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