All throughout its discussions of if and when they will raise interest rates, Federal Reserve officials have insisted that their decisions will be “data driven.” This is, of course, the right approach. Decisions that so profoundly affect the economic livelihood of the American people shouldn’t be based on a hunch. And the fact is, the data in this morning’s jobs report point to a slow but steady recovery. Nonfarm payroll employment rose by 215,000, very much in line with what we’ve seen this year so far (average of 211,000), and still slower than job growth in 2014, which averaged 260,000 a month. The unemployment rate held steady at 5.3 percent. The prime-age employment-to-population ratio fell slightly to 77.1 percent, just below where it’s stubbornly been stuck the last four months. And, the arguably most important measure for the Fed—nominal average hourly earnings—rose only 2.1 percent over the year, in line with the same slow growth we’ve seen for the last six years. Yes, interest rates have been low for a long time, but there’s no reason for the Fed to be impatient or to raise rates on a whim. The data show little sign of the “some further improvement” Fed officials have said they are waiting for. This morning’s jobs report is clear evidence that the Fed should continue to hold the line, and let the economy continue to recover before raising rates prematurely.
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