Yesterday, the Department of Labor announced more positive news for the United States job market, hailing the creation of 215,000 more jobs and noting an increase in average weekly work hours.
CNBC’s financial department Money Control said the July numbers were further evidence that the U.S. job market is leaving the days of the recession in the distant dust, boasting the lowest jobless rate (5.3 percent) in the past seven years.
A Barclay’s economist was quoted as saying the continued job growth is a positive sign that the Federal Reserve will implement a rate increase in September.
The rate hikes come in the wake of several years of lowest interest on home loans and car loans in an effort to stimulate the economy after the global financial crisis. While increased rates mean consumers will pay in the long run more for their home or their car, it’s a reflection of the strength of the economy and the robust labor market.
The Houston Chronicle noted that the rate hike would be the first since 2006 and would end the efforts to stabilize the once “teetering” banking industry.
It would be the Fed’s first rate hike since 2006. And it would end the aggressive campaign the central bank began after the 2008 financial crisis to save a teetering banking system and energize an ailing economy.
The interest rate increase will most likely take place over the course of a couple of months.
Some within the financial sector say the September rate increase isn’t the foregone conclusion it’s being portrayed as. Pay raises are still “sluggish” and Americans who have “given up” on their job searches have yet to be lured back into the job market.
Pay increases, for example, are still sluggish. And hiring hasn’t been strong enough to draw millions of Americans who’ve given up on their job searches back into the hunt.
CBS News also highlighted the sluggish pay increases, noting that raises in pay are “barely keeping -pace with inflation.”