MONEY Federal Reserve

What Will the Fed Do Today? These Five Numbers Can Tell Us

With the economy and job markets finally looking healthy, the Federal Reserve may signal its first interest rate hike in years.

While you’ve been doing your Christmas shopping, the Federal Reserve’s Open Markets Committee — the club of officials who set short-term interest rates — has been meeting in Washington.

With the economy finally humming along, and interest rates still close to zero, market watchers are wondering how much longer the Fed will hold out before signaling its first rate hike since before the financial crisis.

That step isn’t likely to be taken Wednesday, when the two-day meeting concludes and the Fed issues an official statement. But economists do expect a significant change in the language that the Fed uses to telegraphs its policies.

In particular, the central bank has consistently stated that it will keep rates low for a “considerable time.” But a recent survey conducted by Bloomberg found that four-fifths of economists believe the Fed will drop the phrase today in order to signal a more aggressive time table — and that rates are actually likely to rise in the middle of next year.

In the meantime, here are five data points the Committee is likely discussing. The statement comes out at 2 p.m.

 

GDP

GDP

The economy is growing at a healthy pace. After a blip earlier this year — widely attributed to 2013’s severe winter — the economy grew 3.9% in the third quarter. Hiking interest rates would presumably help fight off unwanted inflation. But it would also slow economic growth and could even throw the country back into a recession. That was a much bigger risk when growth was crawling along at 1% to 2% rate. With growth close to 4%, the Fed may finally be getting ready to move.

 

Payroll

Jobs

Of course, GDP growth doesn’t mean much if you can’t actually get a job. And the employment picture has been downright sluggish in recent years, even at times when the broader economy was showing signs of life. But that’s finally started to change. The most recent jobs report, which showed the economy adding 321,000 jobs in November, was widely regarded as one of the best in years.

 

Inflation

Inflation

While GDP and jobs growth may be robust enough to justify an interest rate hike, the Fed may remain cautious for several reasons. The first one is that there is not much forcing its hand. Interest rates hikes are the central bank’s main weapon for fighting inflation. But with prices rising at less than 2%, there’s not much inflation to fight. That’s good news, meaning the Fed has flexibility to keep rates low if it seems helpful.

 

stocks

Stocks

Like the economy more broadly, the stock market is doing well — up about 12% so far this year. Nonetheless the Fed will want to avoid roiling markets with unexpected news. That’s what happened during 2013’s “taper tantrum” when markets slumped after the Fed let slip plans to taper off its stimulative bond purchases. Since economists are widely expecting the Fed to hint at higher interest rates, that seems unlikely this time…but markets are always fickle.

 

oil

Oil

While the U.S. may be looking rosier, there’s still plenty to worry about in the rest of the world. One dramatic manifestation of these fears: the sudden, sharp drop in oil prices. Booming economies tend to use a lot of energy. Weakening ones less so. In many ways cheap oil helps the U.S. It’s certainly been a boon to Detroit. But it can also have destabilizing effects. It’s the key reason the ruble has crashed in the past few days. It’s also the prime suspect in the U.S. stock market swoon in past two weeks. Shares have fallen nearly 5% since Dec. 5, including 112 points on Tuesday. Those jitters are one more reason the Fed may choose to tread carefully.

MONEY Jobs

Here’s What To Expect From The Job Market in 2015

There should be good news for job seekers in 2015 as the US economy continues to rebound.

MONEY Jobs

Why It’s Still Hard to Find the Job You Really Want

workers at construction site
Don Mason—Gallery Stock

The U.S. economy is adding jobs at a surprisingly fast pace. They just might not be the ones you want.

The U.S. added 321,000 new jobs in November, according to the Labor Department. Although unemployment remained unchanged at 5.8%, the new jobs number beat most economists’ estimates. The strong results follow news on Tuesday that the economy grew at a 3.9% clip in the third quarter. Combined with the preceding period, that represents the fastest six-month expansion in more than a decade.

And yet the job market still feels sluggish for many middle-income job seekers, or those looking for a job that’s better than what they’ve got now.

The problem is that the post-recession economy is still better at producing marginal jobs—think retail and food service gigs—than the comparatively well-paying construction, manufacturing, and government jobs that let middle-class people buy homes and support their families.

That’s led to what some call a “low-wage recovery.” As recently as August, the National Employment Law Project, a labor group, calculated that 41% of job growth in the previous year was in low-wage industries, compared with just 26% in middle-wage industries.

A look at Friday’s numbers suggests that dynamic starting to change, but slowly.

The U.S. added 50,000 more retail jobs in November. There were also 27,000 additional jobs in bars and restaurants.

That kind of growth outpaced growth in sectors like construction, which added 20,000 jobs, and government, which added just 7,000. One bright spot was manufacturing. Economists have long warned this sector, hobbled by trends like automation and competition from low wage countries, isn’t ever likely resume it’s former stature. It’s been making something of comeback nonetheless: 28,000 manufacturing jobs were created in November.

Moody’s Analytics economist Ryan Sweet argues the jobs picture will steadily improve for middle income workers. On Thursday, he forecast construction hiring would continue to show gains in 2015 and 2016, driven in part by the housing market, where supply is getting tight again—Moody’s Analytics recently estimated rental vacancy rates at 20-year lows. Meanwhile, steadily improving GDP should replenish state and local tax coffers, allowing governments to start hiring again. Even Detroit, one of the recession’s biggest victims, has seen its prospects improve. Pointing to low oil prices, Sweet cited a forecast that automakers could sell 17 million cars next year.

These are all the kinds of trends you’d expect to see in a recovery—the surprise is how many years it has taken to get to this point.

 

TIME

U.S. Adds 321,000 Jobs, the Most in Nearly 3 Years

A now hiring sign is posted in window of an O' Reilly auto parts store on Nov. 7, 2014 in San Rafael, Calif.
A now hiring sign is posted in window of an O' Reilly auto parts store on Nov. 7, 2014 in San Rafael, Calif. Justin Sullivan—Getty Images

Job gains have averaged 241,000 a month this year

(WASHINGTON) — U.S. employers added 321,000 jobs in November, the biggest burst of hiring in nearly three years and the latest sign that the United States is outperforming other economies throughout the developed world.

The Labor Department also said Friday that 44,000 more jobs were added in September and October combined than the government had previously estimated. Job gains have averaged 241,000 a month this year, putting 2014 on track to be the strongest year for hiring since 1999.

The unemployment rate remained at a six-year low of 5.8 percent last month.

The robust job gains come after the economy expanded from April through September at its fastest pace in 11 years. The additional jobs should help boost growth in coming months.

Still, the healthy hiring levels have yet to boost most Americans’ paychecks significantly.

The improving U.S. job market contrasts with weakness elsewhere around the globe. Growth among the 18 European nations in the euro alliance is barely positive, and the eurozone’s unemployment rate is 11.5 percent. Japan is in recession.

China’s growth has slowed as it seeks to rein in excessive lending tied to real estate development. Other large developing countries, including Russia and Brazil, are also straining to grow.

Most economists say the United States will likely continue to strengthen despite the sluggishness overseas. The U.S. economy is much less dependent on exports than are Germany, China and Japan. U.S. growth is fueled more by its large domestic market and free-spending consumers, who account for about 70 percent of the economy.

That trend helps support the steady U.S. job growth. Most of the industries that have enjoyed the strongest job gains depend on the U.S. market rather than on overseas demand. Retailers, restaurants and hotels, and education and health care, for example, have been among the most consistent sources of healthy hiring since the recession officially ended in 2009.

Manufacturing, which is more exposed to overseas ups and downs, has added jobs for most of the recovery but in smaller numbers. That is a likely reason why pay growth has been tepid since the recession ended. Companies and industries that are more exposed to international competition typically pay higher salaries.

Temporary hiring for the winter holidays may be providing a boost, though it isn’t clear how much occurred last month and how much in December. Shipping companies have announced ambitious plans: UPS has said it expects to add up to 95,000 seasonal workers, up from 85,000 last year. FedEx plans to hire 50,000, up from 40,000.

The National Retail Federation estimates that seasonal retail hiring could grow about 4 percent to as high as 800,000.

Most recent figures on the economy have been encouraging. Americans are buying more cars, which will likely keep factories busy in coming months. Auto sales last month rose to their second-fastest pace this year. Car sales are on track to rise 6 percent this year from 2013.

And a survey by the Institute for Supply Management, a trade group of purchasing managers, showed that services firms expanded at nearly the fastest pace in eight years last month. Retailers, hotels, construction firms and other service companies added jobs, the survey found, though more slowly than in October.

The ISM’s separate survey of manufacturing firms showed that factories are expanding at a brisk pace. New orders and order backlogs rose, pointing to steady growth in coming months.

There have been some signs of moderating growth. Consumer spending rose only modestly in October. And businesses ordered fewer big-ticket manufactured goods that month, excluding the volatile aircraft category. That indicates that companies are holding back on investment.

As a result, most economists have forecast that the economy will slow in the final three months of the year to an annual pace of 2.5 percent. That would be down from a 4.3 percent pace from April to September, the fastest six-month pace since 2003.

TIME Demographics

4 Ways Millennials Have It Worse Than Their Parents

millenial money
Adrian Samson—Getty Images

The latest Census numbers show Americans aged 18 to 34 struggling worse than their parents did in the '80s

Millennials make less money, are more likely to live in poverty and have lower rates of employment than their parents did at their ages 20 and 30 years ago.

That’s the bleak assessment from the U.S. Census Bureau’s latest American Community Survey numbers Thursday, which paint a financially disheartening portrait of Americans aged 18 to 34 who are still trying to rebound from the Great Recession.

The survey largely shows that millennials are worse off than the same age group in 1980, 1990 and 2000 when looking at almost every major economic indicator:

1. Median income
Millennials earned roughly $33,883 a year on average between 2009 and 2013 compared with $35,845 in 1980 and $37,355 in 2000 (all in 2013 inflation-adjusted dollars).

(MORE: American Women are Waiting to Have Kids)

2. Leaving home
More than 30% of millennials live with at least one parent compared to about 23% in 1980, largely because they can’t get a job.

3. Employment
Only about 65% of millennials are currently working compared with more than 70% in 1990

4. Poverty
Almost 20% live in poverty compared with about 14% in 1980.

But it’s not all bad news. The new Census numbers show that young Americans are much more diverse and educated than previous generations. About 22% have a bachelor’s degree or higher (up from 16% in 1980), and a quarter have grown up speaking a language other than English at home (up from 10% in 1980).

And possibly the most interesting statistic in the new numbers? A little over 2% of those aged 18 to 34 are veterans, compared with almost 10% in 1980.

Read next: Millennials Are Mooches…and Other Money Myths

TIME Innovation

Five Best Ideas of the Day: December 3

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. The Obamas should consider teaching in an urban public school after 2016.

By Valerie Strauss in the Washington Post

2. Tech journalism needs to grow up.

By Michael Brendan Dougherty in The Week

3. Despite conventional wisdom to the contrary, the surge strategy didn’t end the war in Iraq. We shouldn’t try it again against ISIS.

By Daniel L. Davis in The American Conservative

4. Adjusting outdated rules for overtime could give middle class wages a valuable boost.

By Nick Hanauer in PBS News Hour’s Making Sense

5. A new solar power device can collect energy even on cloudy days and from reflected lunar light.

By Tuan C. Nguyen in Smithsonian Magazine

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME

Applications for US Jobless Aid Jump to 313,000

The increase is unlikely to raise concerns about the broader health of the job market

(WASHINGTON) — The number of people seeking U.S. unemployment benefits jumped last week, pushing total applications above 300,000 for the first time in nearly three months.

The Labor Department says weekly applications rose 21,000 to a seasonally adjusted 313,000, the highest level since the first week of September. The four-week average, a less volatile measure, rose 6,250 to 294,000.

The increase is unlikely to raise concerns about the broader health of the job market. At least some of the rise occurred because of seasonal layoffs in businesses affected by the cold weather, such as construction. The department seeks to control for such seasonal factors but doesn’t always do so perfectly.

Applications had been under 300,000 for 10 straight weeks, an unusually low level that indicates companies are laying off few workers.

TIME Economy

2 in 5 Young Americans Don’t Want a Job

Mid adult man sitting on sofa using computer game control
Kathleen Finlay—Image Source/Getty Images

Analysis shows increase in the percentage of teenagers and twenty-somethings outside the labor force

Nearly 40% of people in the United States ages 16 to 24 say that they don’t want a job, accounting for a sizable portion of the 92 million Americans who are currently outside the labor force, according to a new analysis of labor statistics.

The figures do not include young people who aren’t working, but are actively seeking employment. About 10% of Americans aged 20 to 24 and 19% of those aged 16 to 19 are considered unemployed, which means they are actively seeking work.

According to Pew Research Center analysis of Bureau of Labor Statistics data, 39.4% of men and women aged 16 to 24 are outside the labor force over the first 10 months of 2014. That’s up from 29.5% in 2000, the steepest rise of any age group and one that pre-dates the recent financial crisis.

The U.S. unemployment hit 5.8% last month, the lowest number since 2008.

TIME Economy

Hurray! Americans Are Quitting Their Jobs

US Federal Reserve Chair Janet Yellen attends a conference of central bankers hosted by the Bank of France in Paris
U.S. Federal Reserve Chair Janet Yellen attends a conference of central bankers hosted by the Bank of France in Paris Nov. 7, 2014 Charles Platiau—Reuters

Highest quitting rate since 2008 is a key indicator of rosier economic times

In good news for the U.S. economy, the Labor Department reported that 2.8 million workers, or 2% of U.S. employees, voluntarily left their jobs in September — the fastest rate since 2008.

It might sound strange, but Janet Yellen, Federal Reserve Chair, has zeroed in on the quits rate as a progress marker for returning to a healthy labor market, reports Reuters.

The 2007-09 recessions saw a decrease in the quits rate, with most workers not optimistic enough about the economy to seek opportunities elsewhere. Analysts feared that this had created wage stagnation.

Although joblessness has been decreasing, the lack of worker turnover meant employers had no reason to increase salaries. But according to this latest report, hiring rates are now increasing, giving people more employment options.

The report also highlighted that the job openings rate has fallen, but still remained above pre-recession levels. In the first week of November, the Labor Department reported 278,000 claims for unemployment benefits from the state.

However, “this increase is nothing to worry about,” Ian Shepherdson, a Pantheon Macroeconomic economist, told Reuters, explaining that the claim figure has remained under 300,000 for nine consecutive weeks.

[Reuters]

TIME

Economy Adds 214,000 Jobs in October, Unemployment Rate Drops to 5.8%

Jobseekers wait to talk to a recruiter at the Colorado Hospital Association's health care career event in Denver, Oct. 13, 2014.
Jobseekers wait to talk to a recruiter at the Colorado Hospital Association's health care career event in Denver, Oct. 13, 2014. Rick Wilking—Reuters

Unemployment rate drops to lowest level since July 2008

The Labor Department released last month’s employment figures Friday morning, and the report shows that the U.S. labor market has continued to post steady gains while some stubborn weak points still exist. Here are some key points from the October jobs report.

What you need to know: October was the 56th straight month of private-sector job gains in the U.S., and monthly gains have averaged about 227,000 so far this year. The job market has been steadily improving, which is good news. However, on the downside, hourly wages have struggled to make gains and the number of long-term unemployed is still almost 50% higher than it was before the recession hit.

The Federal Reserve, which had continually worried that the labor market is not as healthy as it hoped nearly seven years after the start of the Great Recession, eased up on its view following its meeting last week. The Fed issued this cautiously worded update on its outlook:

“On balance, a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing.”

The big numbers: The U.S. labor market added 214,000 jobs in October, falling shy of economists’ estimates of 235,000 jobs, according to Bloomberg data. The unemployment rate dropped unexpectedly to 5.8% —its lowest level since July 2008 — compared to an anticipated 5.9%. Private employers added 209,000 jobs.

Hourly wages ticked up by 2 cents last month, while the number of long-term unemployed was little changed at 2.9 million.

What you may have missed: October’s gains keep the U.S. labor market on track for its best annual performance since 1999. That year an average 265,000 Americans found jobs every month. The October job additions are a pick-up from the recent three-month average of 224,000 jobs.

The continued growth comes amid global worries of slowing economic growth, although there’s little indication that it has spilled over into the U.S. labor market.

“It all speaks to the story that the U.S. can sustain pretty strong growth even when there are concerns about growth slowing in places like China and the euro zone,” said Jeff Greenberg, a senior economist at JP Morgan Private Bank in New York.

Some of the biggest job gains last month went to the professional and business, and healthcare sectors, which added 37,000 and 25,000 jobs, respectively. Retail hiring has also accelerated as stores geared up for the holiday season ahead, and service-sector employment, which increased by 12,000, is at a nine-year high, according to a note from Goldman Sachs economist Kris Dawsey.

This article originally appeared on Fortune.com

Read next: Let’s Fix It: Blame Unemployment on the Color Blue

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