Newspaper article St Louis Post-Dispatch (MO)

Unemployed Figure Dips to 5.2 Pct. Wages Rise, but Experts Say So Will Interest Rates

Newspaper article St Louis Post-Dispatch (MO)

Unemployed Figure Dips to 5.2 Pct. Wages Rise, but Experts Say So Will Interest Rates

Article excerpt

American workers are enjoying the strongest job market in nearly a decade, with unemployment dipping to 5.2 percent in March and wages on the rise. They should savor it while they can.

Rising interest rates, which have already crimped the stock market, will take some steam out of the economy by the end of the year, many analysts believe.

"There are lots of jobs and employers are paying more. From an employee's perspective, this is a wonderful labor market," said economist Mark Zandi of Regional Financial Associates in West Chester, Pa. "Unfortunately it's too much of a good thing because it ultimately will result in accelerating inflation." That's what prompted the Federal Reserve to boost short-term interest rates by a quarter percentage point last week. Fear of further increases sent stock prices down and the bond market into a dither, pushing long-term rates on bonds and mortgages past six-month highs. Rising interest rates make it more expensive to borrow for home and auto purchases and business investment. …

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