US interest rates

again from the fin review

The US Federal Reserve has made a big bet that recovery of the labour market is a long way from creating a worrisome surge of inflation.
A range of economic data on Friday suggested the Fed has been reading the odds well.

While the Labor Department's monthly employment report showed more than 200,000 jobs created for the sixth straight month, wages were about flat in the private sector and there was little improvement in America's blight of long-term unemployment.

The report supported Fed chair Janet Yellen's view that a sharp drop in the unemployment rate over the last year has masked substantial weakness in the labour market. That could give Yellen room to keep interest rates at rock-bottom levels well into next year - without inflation becoming a threat.


American workers, on average, earned $US24.45 an hour in July, up only a penny from June. Over the last year, wages have grown just 2 per cent, in keeping with where they have been stuck since late 2009.
One reason to be pessimistic about wage growth is that more workers appear to be searching for jobs