economyThe US economy and the labor market continues to improve, the Federal Reserve announced late Wednesday, leaving the door open to raise rates in September, reports Reuters. A day later it became clear that the country’s GDP grew by 2.3% in the second quarter a year earlier, which also increases the chances of raising interest rates. Moreover, the data were revised upwards for the first quarter – a decline of 0.2% to growth of 0.6%.
The economy is recovering
After a two-day meeting in Washington, the Monetary Policy Committee (FOMC) said that there is strong growth in new jobs, but that we should wait another before introducing changes in the policy of low interest rates – now between 0 and 0.25% adopted at the end of 2008 to support the economic recovery. The US central bank’s view that the economy has overcome the decline from the first quarter and is “expanding moderately” despite the decline in the energy sector and global risks.
“The labor market continues to improve with a solid number of new jobs and reducing unemployment,” the statement said. Unemployment in June has made a new decline to 5.3% which is the lowest value since April 2008. The economic activity is growing moderately and inflation remained below the annual target of 2%.
Many experts expect interest rates rise, perhaps at the next meeting of the Monetary Policy Committee in mid-September. “The statement was slightly more belligerent than I expected, but they talk about progress in the labor market and lagging inflation,” said Peter Cardillo, chief market economist at Rockwell Global Capital, said on CNBC. “The fact that recorded a slight progress in the housing market, leaving the door open to raise interest rates in September.”
A different opinion Griyhaus Dan, chief strategist at BTIG. “The Fed is not put in a position to undertake to raise interest rates at its next meeting. There is enough time between now and the meeting in September FOMC, to prepare specialists for market release in September,” he said.
After that statement, the Fed Investors seem reassured that interest rates will not rise until at least septevmri and US stock indexes rose slightly on Wednesday.
Growth of business confidence in the eurozone
Yesterday also became known that economic confidence in the euro area in July reached its highest level in four years after Greece now retains its place in the currency union. The index of business confidence rose to 104 points from 103.5 points in June, the European Commission. Economists were for a decline to 103.2 points, according to an average score of survey by Bloomberg.