Thursday 23 February 2017

Pressure on rates amid US jobs boost

Josh Boak

Federal Reserve Governor Jerome Powell delivers remarks during a conference at the Brookings Institution in Washington. Photo: Reuters
Federal Reserve Governor Jerome Powell delivers remarks during a conference at the Brookings Institution in Washington. Photo: Reuters

US employers added a solid 215,000 jobs in July, signalling a steadily rising job market and likely nudging the Federal Reserve closer to raising interest rates in September.

The Labor Department also said yesterday that the jobless rate held at a relatively low 5.3pc for a second straight month.

Monthly job growth has averaged 211,286 so far this year, indicating that employers are confident that the six-year recovery from the crash will sustain strong consumer demand and require more workers.

July's job growth roughly matched expectations, and the early reaction on Wall Street before trading opened was muted. The Standard & Poor's 500 stock index slipped 0.2pc in morning trading, and US government bond yields fell slightly after an initial spike.

"Another solid jobs report suggests the economy is gaining strength and keeps the Fed on track to raise rates as early as the next meeting" in September, Sal Guatieri, senior economist at BMO Capital Markets, said.

Hiring has remained robust even though the economy's overall growth rate has been subpar and pay raises have been modest.

The Fed has held its key short-term rate near zero since late 2008, a policy introduced after the financial crisis to try to energise the economy through stronger borrowing, investing and spending. (AP)

Irish Independent

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