What might still keep the Fed on track to raise rates later this year is upward pressure on wages. Even though hiring has tapered off, the unemployment rate is low and many companies face pressure to raise pay.
Striking Verizon employees, for instance, won a 11% increase in wages over the next four years instead of the 6% raise the company was offering. A survey by a trade group representing small businesses also said this week that firms are offering higher pay to entice workers.
Average hourly wages climbed 0.2% last month to $25.59. Hourly pay rose 2.5% from May 2015 to May 2016, just a hair below the post-recession high.
The unemployment rate fell to 4.7%: This is the lowest jobless rate since November 2007. In other words job growth is still higher. The job report is cooked up by deliberately ignoring striking employees of Verizon.
Wages continued to grow, albeit at a modest rate: Monthly earnings rose by 0.2% in May bringing the yearly increase to 2.5%.
The May job report stated that it excluded Verizon employees of at least by 34,000. Job growth rate is still higher. Just one month job report will not stop Fed to raise interest rate. Of course they never decrease the rate. .