According to the employment numbers released by the Bureau of Labor Statistics last Friday, 271,000 jobs were added in the month of October. Overall unemployment rate dropped to 5%, a level unmatched since April of 2008. The numbers of jobs added in the month of October beats the 177,000 additions forecaste by most economists.
However, not everyone will be happy with the strong job growth numbers. For those who are seeking loans, it should be noted that the Federal Reserve’s policy making committee maintained near zero interest rates at their October meeting, but have repeatedly indicated the American economy could be strong enough for a move in December.
The Federal Reserves has held its benchmark federal-funds rate at near zero since December 2008 to bolster the U.S. economy through a financial crisis, deep recession and slow recovery. According to Tara Sinclair, chief economist at job search site Indeed, “The data tips the scale toward the Fed moving in December…But this is good news about the trajectory of the economy and points to having stronger growth going into 2016.”
William C. Dudley, the president of the Federal Reserve Bank of New York and the first senior Fed policy maker to signal in late August that the Fed wasn’t quite ready to raise rates, said on Thursday November 12, 2015 that his reasons for hesitation have receded. Now, he said, he sees a stronger case for moving ahead.
When addressing the Economic Club of New York, Dudley said, “I think it is quite possible that the conditions the committee has established to begin to normalize monetary policy could soon be satisfied,” He also said he saw the risks of acting too soon and waiting too long as “nearly balanced.”
It should be noted that William C. Dudley is an influential adviser to the Fed’s chairwoman, Janet L. Yellen. His comments also reflect the tentative consensus among Fed officials that the time has come to raise the benchmark rate when the Federal Open Market Committee meets in Washington on Dec. 15 and 16.