Page 7 - Aruba Today

U.S. NEWS A7
Friday 4 December 2015

US Financial Front:

Yellen signals growing likelihood of a December rate hike

Federal Reserve Chair Janet Yellen arrives on Capitol Hill in Washington, Thursday, Dec. 3, 2015, a record low near zero for solid trend of job creation”
the past seven years. that would indicate the
to testify before the Joint Economic Committee. Yellen said that economic conditions are falling Many private economists economy has good mo-
are forecasting the first mentum going forward.
into place for policymakers to raise interest rates when they meet in two weeks, as long as there rate hike by the Federal Yellen repeated past com-
Open Market Committee, ments that she believed
are no major shocks that undermine confidence. (AP Photo/Jacquelyn Martin) the Fed’s policy panel, will two key factors keeping
be a modest quarter-point inflation below the Fed’s 2
MARTIN CRUTSINGER al pace that will keep bor- and inflation. move, followed by four percent target — the rise in
AP Economics Writer rowing costs low for con- “Such an abrupt tightening more quarter-point moves the value of the dollar and
WASHINGTON (AP) — Fed- sumers and businesses. would risk disrupting finan- over the next year. falling oil prices — were
eral Reserve Chair Janet In testimony before the cial markets and perhaps “Between today and the likely to fade over time.
Yellen told Congress Thurs- Joint Economic Commit- even inadvertently push next FOMC meeting, we Private economists said
day that economic condi- tee, Yellen warned that the economy into a reces- will receive additional Yellen’s remarks over the
tions appear to be improv- waiting an extended pe- sion,” Yellen said. data that bear on the eco- past two days sent a strong
ing enough for policymak- riod of time to start raising She also cited concerns nomic outlook. These data signal that the Fed is ready
ers to raise interest rates rates would carry risks. by Fed critics that keep- include a range of indica- to start raising interest rates
when they meet in two “Were the FOMC to delay ing rates exceptionally low tors regarding the labor at its meeting this month.
weeks — as long as there the start ... for too long,” for too long “could also market, inflation and eco- Gus Faucher, senior econ-
are no major shocks that she said, “we would likely encourage excessive risk nomic activity,” Yellen told omist at PNC, said he was
undermine confidence. end up having to tighten taking and thus undermine the JEC. “When my col- looking for a rate hike “bar-
Yellen said that even af- policy relatively abruptly financial stability.” leagues and I meet, we will ring much weaker data
ter the first rate hike, the to keep the economy from Fed policymakers meet on assess all of the available over the next couple of
Fed expects future rate in- overshooting” the Fed’s Dec. 15-16. The Fed’s key data and their implications weeks.” The Fed has left
creases will be at a gradu- goals for unemployment short-term rate has been at for the economic outlook its target for the federal
in making our decision.” funds rate, the interest that
The Labor Department will banks charge on overnight
release its November em- loans, near zero since De-
ployment report on Friday. cember 2008. It has used
Analysts believe the data ultra-low borrowing costs
will be key in determining as a way to stimulate eco-
whether the Fed boosts nomic activity and fight
rates this month. the worst recession since
Asked about the upcom- the Great Depression of
ing unemployment report, the 1930s. The Fed has not
Yellen said the Fed will be raised the funds rate since
watching for “a continued June 2006.q

Applications for jobless aid rose last week

JOSH BOAK 300,000 since late March, of higher incomes could
AP Economics Writer which is usually associ- support additional growth
WASHINGTON (AP) — ated with net monthly job through consumer spend-
More people applied for gains in excess of 200,000. ing, offsetting some of the
U.S. unemployment ben- The number of people col- drag caused by a strong
efits last week, but the lecting benefits has fallen dollar and weak global
levels remain near historic 9.3 percent from a year economy.
lows that point toward a ago to 2.2 million. BIG PICTURE: Jobless
healthy job market. THE TAKEAWAY: The job claims are a proxy for lay-
THE NUMBERS: Weekly ap- market looks healthy be- offs, so the low level indi-
plications for jobless ben- cause employers are lay- cates that job growth will
efits rose 9,000 last week ing off relatively few work- continue. Employers are
to a seasonally adjusted ers and potentially add- expected to have added
269,000, the Labor Depart- ing staff in anticipation roughly 200,000 jobs in the
ment said Thursday. The of continued economic November jobs report be-
four-week average, a less growth. ing released Friday.
volatile measure, ticked KEY DRIVERS: Hiring over The economy gained
down to 269,250, not far the past three years has 271,000 jobs in October,
off from the recent low of returned more Americans the largest monthly in-
259,250 achieved at the to work, prompting some crease this year. The un-
end of October. evidence that wages are employment rate fell to 5
Weekly filings have stayed starting to rise at a stron- percent from 5.1 percent
below the key threshold of ger pace. The possibility in the previous month.q