At the end of the last central bank meeting, in Washington on November 2, Chairman Jerome Powell dispelled the expectation of a slower pace in interest rate increases, after four consecutive 0.75 percentage points increases, to 3.75-4.0 percent.
At the press conference, following the end of the meeting, Chairman Powell said: “the question of when to moderate the pace of increases is now much less important than the question of how high to raise rates and how long to keep monetary policy restrictive.” He added, “it is very premature to be thinking about pausing, we think we have a ways to go.”
In support of the restrictive monetary policy posture, the following Friday, the Labor Department revealed the creation of 261,000 new non-agricultural jobs in October, less than the revised September figure of 315,000, but still indicative that the labor market remains strong. The unemployment rate in October increased slightly to 3.7 percent, from 3.5 percent in September. Hiring was vigorous in certain sectors. For instance in October, health care added 53,000 workers and manufacturing added 32,000, while among sectors sensitive to high interest rates, construction added only 1,000 new jobs.
The next meeting of the central bank Open Market Committee is scheduled for December 14, after the release of the November employment figures.
