The pulse of the U.S. job market will be revealed Friday morning when the government releases the employment data for March. Economists expect employers to have added more than 200,000 jobs.
It's been quite a run for the U.S. job market. Over the past year, the economy has added more than 200,000 jobs every month. That level of job creation hasn't happened since a 13-month run back in 1994-95.
Economists predict that the economy added 245,000 jobs in March. They also predict the unemployment rate remained at 5.5 percent.
Not long ago Federal Reserve policymakers suggested that when the rate reached that level they could begin raising interest rates. But, economist John Canally of LPL Financial says the Fed has adjusted its thinking for a variety of reasons.
First, he says, inflation is running below the 2 percent level that the Fed thinks is optimal for a healthy economy. That's because wage growth is lagging.
Canally adds, "What the Fed wants to see, or hopes to see, is that all this growth in the job market will eventually begin to push up wages. And then wages are a prerequisite to get any kind of inflation to stick. So until you get some wage inflation, you're not likely to get very much overall inflation in the economy."
Wage growth has been very slow during this recovery, about half it's normal rate. That suggests employers aren't having to compete hard to attract workers. And, it may indicate the current 5.5 percent unemployment rate understates the problem.
Also, low labor force participation rates suggest a lot of workers remain on the sidelines. And, there are 6.5 part-time workers who want full-time jobs.
Until data on wages, participation and part-time work improve further, Canally thinks the Fed will be reluctant to raise interest rates.
Copyright 2015 NPR. To see more, visit http://www.npr.org/.
