Prospects of the Federal Reserve hiking the interest rates in mid 2015 seem increasingly likely. US employers have increased hiring in September and the jobless rates fell to a six year low.
The latest report on employment is a significant measure of the health of the economy ahead of the congressional elections on November 4th.
President Barack Obama’s message of a much improved economy some experts say rings hollow because of weakness in wages which persisted all through last month. However the data underscores the strides which labor market has made in the current financial year.
US nonfarm wages rose by 248,000 last month while the jobless rate fell two-tenths of a point to 5.9 percent, the lowest since July 2008 according to figures released by Labor Department said.
The latest reports hints that after a long time, employment growth commensurate with the economic expansion.
The latest data is much better than Wall Street analysts had predicted. Investors had doubled their bets that the Feds will hike interest rates in mid 2015. The central bank has maintained the benchmark rates at Zero since the crash in 2008 to kick start and encourage investments and hiring.
Top bond firms from Wall Street are forecasting that Federal Reserve will start raising interest rates no later than June 2015. Bond markets are under pricing the risks so that the US Central Bank will start to tighten the belts.
Still analysts are worried about stagnant wages and the average hourly rates have actually fallen by a penny last month.
Still, analysts noted the report bore a large caveat in the form of persistently stagnant wages. Average hourly earnings actually slipped a penny last month.
The weak wage growth is making the Fed policy makers cautious about when to get on with the first rate hike.