Economists are finally seeing some bright lights upon the horizon for what has been a dark and grim U.S. Economy this year. But even though the job market got a hefty push in the right direction we still saw unemployment rates creep up to 5.5% from 5.4%. The number that is fundamentally important to keep an eye on is the number of individuals who are participating in the labor force. Over the recent years of economic volatility and increasing unemployment, the number of people looking for jobs continued to considerably decrease which made unemployment rates look less grim than they probably actually were. Many people who fell out of the job market, due to a variety of factors, but certainly many out of consistent inability to land new employment, are now finding themselves reinvigorated to scour the increasing job market. As a result, do not be surprised to see unemployment continue to move slightly upwards or remain largely unchanged even as new jobs are added—as longtime disheartened job seekers are just again getting ready to put skin in the game. People are now realizing, with more jobs and, of course, more lucrative employment opportunities, that dipping back into the labor force may be worth it.
Another good sign is that average earnings rose about .3% over previously recorded months. This number is actually made more appealing if we also consider that according the US Government’s published record on May 22, 2015, inflation is down .2%. With more people working and making more money, all signs are pointing to a healthy enough economy for Federal officials to increase interest rates up from near-0 and towards economic growth. The foreseeable problem with changing interest rates, at least too quickly, is that many financial institutions and their growth depends upon the monetary policies of the U.S. This means that a change in interest rates could drastically change how a business is operating. Guidant Financials Chief Executive, David Nilsen, stated the concern this way: “the concern is, does that change both the businesses’ ability to invest and the consumers’ ability to spend.”
However it turns out in the end, at this point in the game, upwards is the right direction to be going. More jobs and more money are the signs of an economy that’s still working.