It doesn’t look promising for a US interest rate hike in June, or even July. At a luncheon for the World Affairs Council of Philadelphia’s yesterday, Federal Reserve Chair Janet Yellen more or less voiced Fed intentions of leaving rates unchanged for the time being.
Friday's jobs report was weaker than expected and Yellen expressed concern about the recent hiring slowdown just one week before the Federal Reserve's committee meets in Washington.
The U.S. economy only added 38,000 jobs in May, the lowest monthly job gain since 2010. Job gains in April and May were also lower, the number of part-time workers surged up and many people stopped looking for work.
At Monday’s meeting, Yellen held off offering a timetable for future rate hikes. She did indicate, however, that rates "need to rise gradually over time" to keep the economy healthy.
The Fed chair waxed optimistic about the economy which added roughly 2.7 million jobs last year. The unemployment rate is quite low at 4.7%, and much of its progress during the recovery from the Great Recession has been positive.
Australia Interest Rate Held Steady
In Australia, Governor Glenn Stevens left the cash rate unchanged at 1.75 per cent citing slower global economic growth especially in a number of emerging markets and continued low commodity prices.
Recent data suggest overall growth is continuing in the country with domestic demand as well as exports expanding at a pace at or above trend. Labor market indicators have been more mixed of late, but are consistent with continued expansion of employment in the near term while inflation has remained low. Stevens pointed to low interest rates helping to support domestic demand and lower exchange rates helping trade.