How soon is soon?
Federal Reserve decision-makers say they are ready to raise their target short-term interest rates “soon,” according to minutes of their most recent meeting. A significant piece of data helping investors anticipate the timing of any change will be released Friday.
While the next Federal Reserve interest rate meeting isn’t until mid-June, the May employment report could seal the fate of the group’s stated desire to raise interest rates three times this year. It has fulfilled one-third of that ambition so far. That three-hike forecast hinges on steady economic growth.
The Federal Reserve resists concentrating on any one month of data. So look at the trend so far for job creation this year. Employment data has been steadily slowing. New job growth over the first four months of 2017 is off to its slowest pace since 2010, the first year after the end of the Great Recession.
With the official unemployment rate below 5 percent, that could partly be attributed to the tight labor market. Companies may not be creating as many jobs because they’re having a tough time finding qualified candidates. After all, median wages have grown, indicating increased competition for workers.