Workers returning to the labor force in unexpected numbers and landing jobs could slow the Fed's timing in raising interest rates. Conway Gittens reports.
Inflation is heating up and unemployment is heading down - just like the Federal Reserve wanted them to - all the pieces now in place for Fed Chief Janet Yellen to finally start raising interest rates. But the Fed doesn't seem to be in a rush.. and this might be one reason why.. Reuters Fed Correspondent Howard Schneider: SOUNDBITE: HOWARD SCHNEIDER, FED CORRESPONDENT, REUTERS, (ENGLISH) SAYING: "There's evidence over the last couple of years that people who were out of the labor force - sort of on the sidelines, not looking for a job at all - have been coming back in and getting work at a pretty unprecedented pace. So the fact that people are coming off the sidelines, directly into jobs, is really encouraging for Janet Yellen and maybe a reason why the Fed wants to see this process continue as long as possible." So Now the Fed - that has tried everything in the book to get the economy going again - is willing to stand-by and wait to see how this plays out… But slow to move, doesn't mean no move. SOUNDBITE: HOWARD SCHNEIDER, FED CORRESPONDENT, REUTERS, (ENGLISH) SAYING: "It looks like they are going to make another move in December." And the rate hikes in 2017 may be few and far between. Another experiment by a Federal Reserve willing to do what it takes until the economy is strong enough to make it on its own.