In March, 12600 new jobs were added but now the hiring has slowed down. According the article, the economy seems to be slowing down as well. Hourly wages have risen but hours worked have declined. Some say this is only temporary and expect the economy to pick back up later in the year. Due to the slowdown the Federal Reserve wants to raise the interest rates soon.
Link to Article
9 comments:
If the economy appears to be in a slowdown, the Federal Reserve will keep interest rates low to encourage spending, ultimately boosting the economy.
I agree with Emily. I assumed that this would be motivation to keep interest rates low to stimulate business investment. I also do not feel that this statistic is worth worrying about yet. 126,000 new jobs in a 31 day period is still a decent number for chopping away at the unemployment percentage. Its possible the slow down is a result of nearing the natural unemployment level.
I agree, the Fed should raise interest rates when the economy has "boosted" to a growing point, then the higher rates can be used to slow down and save.
I agree with all of the previous comments, the Fed should keep interest rates low to stimulate business investment. People tend to spend more when interest rates are low, so we should not raise interest rates just yet.
It seems from the article that they are not going to immediately raise the interest rates, at least not until the end of summer. Furthermore, Janet Yellen "warned that the recovery was fragile...that the Fed would move slowly to raise rates."
In regards to raising short-term borrowing costs, that may be due to consumer savings because of lower gasoline prices, and increase in hourly wages.
As the interest rate is already very close to zero, lower interest rate would have limited effect on stimulating economy. An expected interest rate can lead to short term investment and high liquidity, which could improve the economy.
This is good to see that the United States has added 126,000 jobs for the month of March. However, I agree with the previous comments that the interest rates should remain lower so people are encouraged to spend rather than save and businesses can continue to make investments. Hopefully the economy can pick back up to growth rate that it had previously achieved earlier in the year and this economic slow down is just a minor speed bump.
Unless it becomes a trend, it isn't really worth worrying about. Also, 2014 was fairly high for job growth so this could just be the market evening back out.
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