Jobs Figures Support Further Rate Hikes
Statistics on new jobs released today and jobless claims figures released yesterday both indicate a strengthening labor market. This provides more support for the view that further rate increases by the Fed are coming:
U.S. Economy Adds 207,000 Jobs, More Than Estimated, as Growth Accelerates, Bloomberg: U.S. employers added 207,000 workers in July, a bigger increase than expected ... The jobless rate held at 5 percent, matching an almost four- year low … Incomes accelerated last month. … The prospect of higher wages in coming months means Fed policy makers will keep increasing interest rates to contain inflation, economists said. Gains in efficiency, which have allowed companies to limit hiring, may be starting to wane...
Overall, this is a good jobs report. Barry Ritholtz dissects the numbers further and finds a few spots of weakness, but in the end comes to the same conclusion, and Dean Baker at MaxSpeak notes the increase in wages. Rates are going up.
Update: Jobs Picture from the EPI notes in its sub-header that "Labor market improving at healthy pace, though manufacturing sector continues to lag." William Polley and David Altig comment as well.
Posted by Mark Thoma on Friday, August 5, 2005 at 09:27 AM in Economics, Monetary Policy, Unemployment |
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