Good Jobs Report Means a Change in Monetary Policy 11/6/2015
GREAT NEWS, good job report = a great day for stocks. BAD NEWS, now the FED will raise rates = bad day for stocks!Hiring at American companies shifted into higher gear in October, helping to lift wages and clearing the path for the Federal Reserve to raise interest rates next month. The 271,000 jump in payrolls reported by the Labor Department on Friday was much more robust than expected and suggested that the economy had enough strength to allow the central bank to begin its move away from the crisis-level interest rate policy it has been following for nearly eight years.
Fed officials were poised to raise short-term interest rates from near zero earlier this year, but they held off as economic conditions overseas worsened and domestic job growth slackened in August and September.
But now the underlying solidity evident in the October report is expected to strengthen the hand of monetary policy hawks who favor an increase in short-term rates, while reassuring Janet L. Yellen, the chairwoman of the Federal Reserve, and her centrist colleagues that the economy can handle modestly higher borrowing costs.