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Jobless rate may slow interest rate hikes

WASHINGTON -- A weaker-than-expected employment report for July might be all the Federal Reserve needs to take a pause from raising interest rates after 17 straight hikes.

That was the conclusion in financial markets Friday after the Labor Department reported that payroll jobs rose 113,000 last month, about 37,000 below the consensus figure. The national unemployment rate rose slightly from 4.6 to 4.8 percent.

Central bankers have been looking for the right moment to bring its interest rate increases to a halt -- and economic analysts said that moment appears to have arrived as a result of the less-than-robust employment picture.

The Fed will meet on Tuesday to make its big decision, which will affect millions of Americans paying back loans tied to variable rates. Chairman Ben Bernanke has indicated an eagerness to stop the interest rate increases that began more than two years ago, in June 2004, but inflation worries so far have made him hesitate.

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