Will 'Disappointing' Jobs Report Affect Fed's Course On Interest Rates?

Transcript

RENEE MONTAGNE, HOST:

And some worse-than-expected news for the economy is out this hour. The U.S. gained just 142,000 jobs last month, which leaves the unemployment rate unchanged at 5.1 percent. NPR economics correspondent Chris Arnold joins us now. Good morning.

CHRIS ARNOLD, BYLINE: Good morning, Renee.

MONTAGNE: This is not the jobs report many were hoping for.

ARNOLD: No, we were thinking this might just be a kind of regular old, boring, much-of-the-same jobs report. But it really was disappointing and in a few different ways. I mean, first of all, the headline number, we gained 148,000 jobs, average for the year has been 200,000. So that was disappointing. We were also hoping that the previous month's numbers for the last couple of months would be revised higher. That didn't happen. In fact, they were revised lower. So we lost 59,000 more jobs that we thought we had already gained.

MONTAGNE: OK, well, I mean, one question that comes up is what this does for the thinking at the Federal Reserve and its promise to raise interest rates this year.

ARNOLD: Right, and Fed chair Janet Yellen has signaled pretty clearly that she feels that the economy is ready to start getting back to normal with an interest rate hike. But now we've had two jobs reports in a row that are worse than expected. There were those revisions. Also, wages have remained flat. Labor force participation actually went down in this last month. So I mean, it's one month's report. Usually, that's not enough to change anything. But it will be interesting to see what the Fed does at this point. And, you know, it's a tough place for the Fed to be. And they, of course, have people on both sides, some yelling, you have to raise rates or the economy will crash and others yelling, don't raise rates or the economy will – you know. So we'll just have to see what Janet Yellen says to do.

MONTAGNE: Over there at the Federal Reserve, Chris Arnold, economics correspondent for NPR. Thanks very much.

ARNOLD: Thank you, Renee. Transcript provided by NPR, Copyright NPR.