Unemployment Drops to 5%; Rate Hike in December Now Likely

[Frodo]

Payrolls in U.S. Climb Most This Year, Jobless Rate at 5%

by Shobhana Chandra 
November 6, 2015 — 8:30 AM EST
Updated on November 6, 2015 — 8:51 AM EST

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[DINGO Joe]

Obama has made America great again.

[Ebsy]

If Congress passes the current budget deal and averts a government shutdown/default, there is going to be enormous pressure on the Fed to raise interest rates come December. Central bankers see the specter of inflation everywhere.

That's not what the Fed was saying last month. That was a complete reversal thanks to pressure from the worldwide slowdown (i.e. everybody but us). Imo, I'd say March at the earliest, and that's being conservative since I really don't want to speak according to a time horizon.

Apparently I was so wrong I was right.

[Sprouts Farmers Market ✘]

If Congress passes the current budget deal and averts a government shutdown/default, there is going to be enormous pressure on the Fed to raise interest rates come December. Central bankers see the specter of inflation everywhere.

That's not what the Fed was saying last month. That was a complete reversal thanks to pressure from the worldwide slowdown (i.e. everybody but us). Imo, I'd say March at the earliest, and that's being conservative since I really don't want to speak according to a time horizon.

Apparently I was so wrong I was right.

Yes you were right it would appear.

Still, I don't think that makes it the correct decision if they go this route (see: q3 projected gdp growth), but I am beginning to see the rationale based on new data (a big reversal from the last 2 months). 10 bps would be easy to tolerate for sure. At least they are remaining data driven rather than giving a timeframe in advance which was ridiculous.

[The_Doctor]

The Federal Reserve shouldn't raise interest rates. That, to me, is a fundamental misreading of the data. Inflation is not a real concern, given the fact that wages are only beginning to rise. The real economy hasn't been doing as well as the statistical data suggests, meaning that most people are barely making enough. Real wages are only beginning to grow (and we haven't established a pattern of sustained real wage growth). Inflation isn't about to spiral out of control, given the weak recovery and the fact there is a ton of deflationary pressures on the economy.

The fear of inflation is overblown. Putting the brakes on the economic expansion now in the hopes of making it a "guided expansion" is ridiculous (and has it ever worked successfully in the past?) As a Republican, I hope the Federal Reserve raises the interest rate (lessening chances of a Hillary win). But speaking strictly, I think it's a foolish policy idea.

[Maxwell]

The Federal Reserve shouldn't raise interest rates. That, to me, is a fundamental misreading of the data. Inflation is not a real concern, given the fact that wages are only beginning to rise. The real economy hasn't been doing as well as the statistical data suggests, meaning that most people are barely making enough. Real wages are only beginning to grow (and we haven't established a pattern of sustained real wage growth). Inflation isn't about to spiral out of control, given the weak recovery and the fact there is a ton of deflationary pressures on the economy.

The fear of inflation is overblown. Putting the brakes on the economic expansion now in the hopes of making it a "guided expansion" is ridiculous (and has it ever worked successfully in the past?) As a Republican, I hope the Federal Reserve raises the interest rate (lessening chances of a Hillary win). But speaking strictly, I think it's a foolish policy idea.

With the exception of this part, I absolutely agree with this post.

[Clarko95 📚💰📈]

Tbh with the small bump in wages and the plethora of job openings, I will be somewhat surprised if unemployment falls below 5% soon, as I would have expected more people to enter the labor force and drive the rate up.


If it does fall below 5% next month, that might be of some interest for all you stats junkies, as the unemployment rate usually takes 2 years or more to drop below 5% from the time it dropped below the 6% mark (late 1994 - early 1997, mid 2003 to mid 2005, etc.). Late 2014 - late 2015 would be a new record.

It usually falls to the 5% - 5.6% range and bounces around in that range as growth, wages, and job creation increase, but hey I guess there's a first time for everything. 

[The_Doctor]

Tbh with the small bump in wages and the plethora of job openings, I will be somewhat surprised if unemployment falls below 5% soon, as I would have expected more people to enter the labor force and drive the rate up.

Honestly, to piggyback on my prior post and the discussion here, the reason the unemployment rate isn't going down further faster is because of a mismatch between jobs and skills. I think that deflationary pressures would significantly ease if more of the population had college degrees or certifications that matched the requirements for most of the still available jobs. Wages aren't growing in my view partially because of that, partially because of the overhang of debt (student debt, etc). Plus, consumer spending is finally taking off after people spending years paying off their debt and being more careful with spending.

Of course, labor participation is the lowest rate it is since the 1970s for a myriad of reasons (older aging population, maybe, early retirements, etc. I'm not really sure.).

[Ban my account ffs!]

I honestly can't figure out why on God's green earth they would raise rates in December.  If they do, I have to seriously wonder about their mental capacities.

Not only is inflation not a deal right now.. it's near post WWII lows (read:  there is no inflation... the September rate was 0.0% and for 2015 we're at 0)... but the rate of wage and employment growth is hardly anywhere near thresholds to warrant action.

The only decent argument I heard, from Foucaulf, was that we have a responsibility to the world and right now returns on American bonds are so low that people are instead buying up and shorting other countries' bonds and ruining their economies... so us raising rates might encourage more selling of American bonds instead.

But that argument is hardly a reason to potentially harm the economy, make the U.S. dollar even stronger, and nip wage and employment growth in the bud just as it begins to move upwards.

If they raise rates.. they're either woefully incompetent or they have ulterior motives.

[Landslide Lyndon]

The Federal Reserve shouldn't raise interest rates. That, to me, is a fundamental misreading of the data. Inflation is not a real concern, given the fact that wages are only beginning to rise. The real economy hasn't been doing as well as the statistical data suggests, meaning that most people are barely making enough. Real wages are only beginning to grow (and we haven't established a pattern of sustained real wage growth). Inflation isn't about to spiral out of control, given the weak recovery and the fact there is a ton of deflationary pressures on the economy.

The fear of inflation is overblown. Putting the brakes on the economic expansion now in the hopes of making it a "guided expansion" is ridiculous (and has it ever worked successfully in the past?) As a Republican, I hope the Federal Reserve raises the interest rate (lessening chances of a Hillary win). But speaking strictly, I think it's a foolish policy idea.

This could have very well have been a Paul Krugman blogpost, and you're right of course.
Let's hope that Yellen doesn't make the same mistake Trichet did at the beginning of the European crisis.

[Green Line]

I honestly can't figure out why on God's green earth they would raise rates in December.  If they do, I have to seriously wonder about their mental capacities.

Not only is inflation not a deal right now.. it's near post WWII lows (read:  there is no inflation... the September rate was 0.0% and for 2015 we're at 0)... but the rate of wage and employment growth is hardly anywhere near thresholds to warrant action.

The only decent argument I heard, from Foucaulf, was that we have a responsibility to the world and right now returns on American bonds are so low that people are instead buying up and shorting other countries' bonds and ruining their economies... so us raising rates might encourage more selling of American bonds instead.

But that argument is hardly a reason to potentially harm the economy, make the U.S. dollar even stronger, and nip wage and employment growth in the bud just as it begins to move upwards.

If they raise rates.. they're either woefully incompetent or they have ulterior motives.

Maybe they have some European vacations planned for next year and want more bang for their buck.  Im going to hold off on converting my money to euros for my upcoming trip until they decide on the rates.  Fingers crossed it goes up!

[Ishiharafan50]

fake

[Kingpoleon]

This is an awful time for this to happen. This gives a full year for the Fed's actions to result in an economic hiccup within six to nine months of their action. If they continued these policies anyway, I'd expect it to result into what would result in the unemployment rate rising to 5.75-6.33% by next November. It's just an educated guess, but an economic bubble caused by any Republican who came into office to change it could keep unemployment down for four to five years. By the time anything like 2007-2008 happened again, it would be 2021-2022. Bad news for Democrats if the Fed goes through with this.

[Ebsy]

Interest rate rise here we come!

[🦀🎂🦀🎂]

Ugh fyck that. Let's hope this is all just a nasty rumour.

[Frodo]

Robust Jobs Report All but Guarantees Fed Will Raise Rates

By NELSON D. SCHWARTZ
DEC. 4, 2015

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[Green Line]

Yay! A stronger dollar is a good thing

[Sprouts Farmers Market ✘]

With the ISM index at 48.6? LOL! This better be 10 bps max!

[Clarko95 📚💰📈]

With the ISM index at 48.6? LOL! This better be 10 bps max!

Yellen low-key trying to derail the economy to help Trump (noted as the most left-wing candidate in the race, as opposed to neoliberal mass murderer Hillary), 'mirite guys?

[Ebsy]

Or maybe... I don't know... the economy could actually be doing okay?

[Hillary pays minimum wage]

Obama has made America great again.

Another brain dead liberal who thinks government is the answer to everything. Sit around and collect other people's money is what makes America great? It's ok you're proof the Democrats are capable of selling to at least some people.

[Ebsy]

Another brain dead liberal who thinks government is the answer to everything. Sit around and collect other people's money is what makes America great? It's ok you're proof the Democrats are capable of selling to at least some people.

You should buy gold.

[Hillary pays minimum wage]

Another brain dead liberal who thinks government is the answer to everything. Sit around and collect other people's money is what makes America great? It's ok you're proof the Democrats are capable of selling to at least some people.

You should buy gold.

That's all us Republicans buy. Don't you listen to Mike Savage?