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BUSINESS A25
Monday 10 August 2015
Steady US job gains likely foretell a new era: Higher rates
C. S. RUGABER Not all of them do. bust average of 235,000 percent a year ago and from their record lows soon-
AP Economics Writer Some economists argue jobs a month. Business- 10 percent in 2009. That’s er or later.
WASHINGTON (AP) — A that a September rate in- es have added jobs for 65 near the 5 percent to 5.2 Rates kept too low for too
new era of higher rates crease isn’t guaranteed. straight months, the longest percent range that the Fed long could make it hard for
on home and car loans, They say Friday’s figures such streak on records dat- says constitutes a normal the Fed to respond to any
steeper borrowing costs showed that some gauges
forbusinesses and the gov- of the job market remain Federal Reserve Chair Janet Yellen prepares to testify before the Senate Banking Committee on
ernment — maybe even a weak. Pay increases, for Capitol Hill in Washington. Another solid U.S. jobs report all but assures the Fed will raise interest
bit more return for savers — example, are still sluggish. rates in September 2015, leading to costlier home and other consumer loans.
is about to arrive. And hiring hasn’t been
That, at least, is the word strong enough to draw (AP Photo/Susan Walsh)
from most economists. Af- millions of Americans
ter another solid U.S. jobs who’ve given up on their ing to 1939. job market. Most econo- future economic slump.
report Friday, they say the job searches back into the “As long as you’ve got pay- mists expect the rate to fall Persistently low interest
Federal Reserve seems all hunt. roll gains above 200,000... even further. rates and subpar inflation
but sure to raise its short- What’s more, a strong dol- this meets the requirement The proportion of adults leave “less scope for the
term interest rate next lar is hurting U.S. exporters of showing some further who either have a job or (Fed) to respond” by cut-
month after keeping it and making foreign goods improvement in the labor are looking for one has ting short-term rates to
pinned near zero for nearly cheaper in the United market and strengthens also stabilized recently. “counteract a weaken-
seven years. States, which could shrink the case for the Fed mov- That suggests that stronger ing in the economy,” Fed
It would be the Fed’s first inflation even further below ing in September,” said hiring has been the main Chair Janet Yellen said last
rate hike since 2006. And the Fed’s 2 percent target. Michelle Girard, chief U.S. reason unemployment has month.
it would end the aggres- “A September rate hike is economist at RBS. kept falling. Girard said the length of
sive campaign the cen- by no means a done deal,” the recovery also points to
tral bank began after the Chris Williamson, chief — RELATIVELY LOW UNEM- — ULTRA-LOW RATES HAM- a hike in September: “Sev-
2008 financial crisis to save economist at Markit, said in PLOYMENT STRING THE FED en years into an expansion,
a teetering banking sys- a research note. The steady job gains have Though economic growth should you still be sitting
tem and energize an ailing “Low inflation and cooling helped reduce the jobless is still modest, Fed policy- at emergency rates?” she
economy. While it could growth will create power- rate to 5.3 percent from 6.2 makers need to raise rates said. q
take months, the Fed’s ful arguments against rate
moves should eventually hikes.”
drive up interest rates for Here are three reasons the
mortgages, auto loans and Fed will likely raise rates
other consumer and busi- when it meets next month
ness borrowing. — and two reasons it may
“The most advertised and not.
anticipated play” is a Fed
rate hike in September, Da- — STEADY HIRING
vid Kotok, chief executive In the past seven years, the
at money management economy has gone from
firm Cumberland Advisors, hemorrhaging millions of
said Friday after the July jobs during the Great Re-
jobs report showed that cession to sluggish and in-
employers added 215,000 termittent hiring during the
jobs and that the unem- first several years of recov-
ployment rate held at a ery to consistently strong
nearly normal 5.3 percent. gains.
“Markets, economists, and In the past two years, em-
analysts expect it.” ployers have added a ro-
China inflation edges up to still-low 1.6 percent in July
BEIJING (AP) — Consumer July’s consumer price in- ous quarter’s six-year low of ruling Communist Party tries sion based on domestic
inflation edged up to a still- dex was the highest so far
low 1.6 percent year-on- in 2015. 7 percent. to steer the economy to a consumption instead of
year in July, government The government aims to
data showed Sunday, leav- keep consumer inflation at Growth has cooled as the more self-sustaining expan- trade and investment. q
ing room for Beijing to cut around 3 percent this year.
interest rates or take other Producer prices, measured A vendor picks a chicken for
steps to stimulate slowing as goods leave the factory, her customer at a market in
economic growth. fell 5.4 percent from a year Yichang in central China’s
The inflation rate rose from earlier, extending a long Hubei province Sunday, Aug.
the previous month’s 1.4 period of declines due to 9, 2015. Consumer inflation
percent, driven by a jump excess production capac- edged up to a still-low 1.6
in pork prices. The National ity in many industries. percent year-on-year in July,
Bureau of Statistics said that Forecasters say the econ- government data showed
costs also rose for medical omy grew by 7 percent or Sunday, leaving room for
care, vegetables, house- slightly below that in the Beijing to cut interest rates or
hold services, tobacco three months ending in take other steps to stimulate
and pre-school education. June, in line with the previ- slowing economic growth.
(Chinatopix via AP)
