STATEMENT: CAP Economist Michael Madowitz on November 2015 Jobs Report
Washington, D.C. — Center for American Progress Economist Michael Madowitz released the following statement today on the November 2015 employment situation figures from the U.S. Bureau of Labor Statistics, or BLS. The BLS announced that the unemployment rate remained steady at 5.0 percent last month.
The November 2015 jobs report builds on last month’s strong labor market showing, with 211,000 jobs added to the economy—marking 69 straight months of job growth. The U.S. economy is improving steadily with plenty of room to grow. But the October and November data do not change the fact that there is still substantial slack in the labor market and that both inflation and wage growth remain low and stable.
Next week, the Federal Open Market Committee is scheduled to convene for its last meeting of the year, and judging from Federal Reserve Chair Janet Yellen’s recent comments and those of other FOMC members, a rate hike before the new year looks increasingly likely. The last time the Fed raised rates when inflation was just 1.3 percent was 1999, but the labor market then looked vastly different than it does now—with considerably less measured slack and less uncertainty about how much more slack would materialize under typical wage growth.
While the economic recovery continues to look strong in the United States, the combined effects of monetary easing in Europe and Asia and higher interest rates at home are difficult to predict. If something does go wrong, it is hard to see how the ability to cut rates by a quarter point is worth the risk. We are all eager to get back to more familiar rates, but we should do so when the data on the real economy say we should. The Fed’s desire to move gradually is understandable, but it is hard to make a case that the benefits of gradualism are as broadly shared as the risks of the Fed moving too soon.
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