Plunging Unemployment Bolsters Case for Earlier Fed Rate Rise

A plunge in U.S. unemployment to the lowest level in more than five years bolsters the case for Federal Reserve officials to raise the main interest rate earlier than they forecast just three weeks ago.

Payrolls surged in June by 288,000 workers and unemployment fell to 6.1 percent, a level that Fed officials didn’t expect to see before the end of the year, a government report showed yesterday. Further job gains would probably prompt the Fed in September to raise its projections for the benchmark interest rate at the end of 2015 and 2016, said Roberto Perli, a partner at Cornerstone Macro LP in Washington.