WASHINGTON (AP) — Federal Reserve policy makers will have conflicting data on the strength of the job market to consider when they gather later this month to decide whether to ease the Fed’s economic stimulus.
The economy has added jobs for 35 straight months. Unemployment has reached a 4½-year low of 7.3 percent and layoffs are dwindling.
But other gauges point to chronic weakness in the job market. The pace of hiring remains tepid. Job growth is concentrated in lower-paying industries. The economy is 1.9 million jobs shy of its pre-recession level, and that’s not counting the additional jobs needed to meet population growth. Nearly 4.3 million people have been unemployed at least six months.
At the same time, employers have little incentive to raise pay, with many unhappy employees having nowhere else to go.
The Fed has been making $85 billion a month in bond purchases, keeping interest rates low in an effort to encourage consumers and businesses to borrow and spend more. Analysts are expecting the Fed to cut those purchases back by perhaps $10 billion.