Even though unemployment “edged up” to 3.6% in February, it doesn’t seem to be enough to protect Americans from another interest rate hike.
Bureau of Labor Statistics data released Friday showed that total nonfarm payroll employment rose by 311,000 last month. According to a Business Insider analysis, if “200,000 or more jobs added in February means we’re getting a bigger rate hike this month.”
The Federal Reserve Bank works to manage inflation in the U.S., and one of the main ways it attempts to do that is by raising interest rates. This makes it more expensive to borrow money, which the Fed hopes will cool down the market and lower prices.
Strategists cited by Business Insider predict another 50 basis point interest rate hike this month, followed by another 25 basis point hike in May.
“If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” Powell said this week.
While there were “notable job gains” in hospitality, retail trade, government and health care during February, unemployment increased in information, transportation and warehousing. Overall, the number of employed persons in the U.S. increased to 5.9 million.
As of late last month, many Americans were struggling financially – and more than half of the respondents of a Fox News poll said they had less money than one year prior. In January, a WalletHub survey found that year-over-year consumer stress was up by 15%.
Over the 12-month period ending in January, the Consumer Price Index increased by 6.4% percent. Since last March, there have been eight rate hikes from the Federal Reserve Bank, according to Forbes Advisor. That means consumers have felt financial pressure from inflation as well as increased interest rates, which impact the cost of credit card payments over the past year.
According to the last CPI report, inflation rose by 0.5% in January. Another report is due to come out Tuesday – that report might also influence rate hikes from the Fed.
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