(Newswire.net — July 3, 2015) — The Bureau of Labor Statistics published their monthly report, which shows the employment rate has fallen to a seven year low. However, according to analysts, the data may vary because labor participation also dropped to a 38-year-low for those 16 and older.
Research probing the US labor market shows a slight decrease of unemployment from 5.5 percent in May, to 5.3 percent in Jun, as American companies added around 223,000 new jobs. However, it is some kind of “Goldilocks” report – alarming, but not too alarming, according to, chief investment strategist at BlackRock, Russ Koesterich.
“You still see strength from job creation, the hourly earnings number was on the soft side. But [for those] worrying about the [Federal Reserve], it offered the best of both worlds. In some ways, it was not too hot or too cold,” Koesterich told CNBC.
The same conclusion comes from David O’Malley, CEO at Penn Mutual Asset Management. According to O’Malley, the report shows the US economy is solid enough for the Federal Reserve to raise interest rates in September. However, a lack of earnings growth could give policy makers an excuse to wait until December to make the long-awaited change.
The report shows the labor market is solid and the Federal Reserve is under no pressure to raise rates.
“We still think that a September rate hike is most likely, as the report does not seem to be too weak for them to pause,” O’Malley told Marketwatch.
According to US Labor Department Secretary Tom Perez, wages should be higher.
“I’m very heartened by the fact that this isn’t about discouraged workers. This is about the pace of entry largely in the workforce,” US Labor Department Secretary Tom Perez said on CNBC’s ‘Squawk on the Street’ on Thursday.
According the US Census Bureau, Baby boomers were replaced by millennials as the largest generation in the workforce in May, however, they point out the fact that more than 93.6 million Americans aged 16 or older didn’t participate in the nation’s labor force last month.
Analysts agree that focusing on one or two statistics that show progress in decreasing the unemployment rate can give a false reading. However, looking at the BLS report as a whole, there is still too much looming uncertainty about the US economy for the Fed to risk raising interest rates in September.