Today kicks off the two day meeting of the Federal Open Market Committee (AKA: The Fed), culminating with tomorrow’s reading of their prepared monetary policy statement. The chances of them raising rates this session is about the same as creating an orange $500 bill; not impossible, but pretty slim.
The Case Shiller Home Price Index showed that home prices rose 5.0% from this time last year. The price of homes continues to rise faster than the wage index. The old maxim that the house you buy today you won’t be able to afford tomorrow continues to hold true for many Americans.
The Bureau of Labor released their Jobs Report showing that 175,000 new jobs were created last month. This is considerably higher than most analysts expected. The data also showed that average earnings increased 0.4% last month and 2.2% from a year ago. The Labor Participation Rate remained at 63.0%, while the much contested Unemployment Rate increased to 6.7%.
Economic growth is dependent on people spending money, and to spend money you need to have money. And for most of us, that means that you need to earn money; like at a job where they pay you. So the Jobs Report is a big deal. Positive economic news like the creation of more jobs is exciting news, but isn’t so good of those of us who like low interest rates, which have now spent the last two months preparing for a move higher.