U.S. employment accelerated in February and the jobless rate fell to a more than 6-1/2 year low of 5.5 percent, signs that could encourage the Federal Reserve to consider hiking interest rates in June.
Nonfarm payrolls rose 295,000 last month after rising 239,000 in January, the Labor Department said on Friday. The decline in the unemployment rate from 5.7 percent in January took it to its lowest level since May 2008.
The gazillions of dollars in stimulus worked. Happy days are here again. This means Ms Yellen can feel free to raise rates next month.The data suggested the U.S job market continued to strengthen, although the drop in the jobless rate largely reflected people leaving the labour force. Average hourly earnings rose by three cents last month.
By the way, unemployment is now at 5.5% I feel strongly that full employment in the US should now be reached whenever unemployment is 6% or less. We all know the figures are massaged and adjusted and don't reflect reality, but they are what they are. Comparing apples to apples: full employment historically defined as 4% does not reflect the incredible social safety net now in place, particularly with disability (physical and mental heath) coverage. With technology shifts thrown in, cost of living, quality of life, 6% certainly equates favorably to 4% unemployment back in the 50's. Not many unemployed folks had large flat-screen televisions in 1951; I assume it's the rare unemployed individual toda that lives in a house without a large flat-screen television. In addition, there are headlines suggesting all the newly arrived, undocumented immigrants will be getting federal checks just for being here. Unemployment at 5.5% -- huge milestone. The market agrees: it's down 250 points -- momentum traders know that Janet Yellen is itching to raise rates.
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