Will 5.9 Percent Unemployment Give the Hawks Reason to Raise Interest Rates?

The Federal Reserve building, Washington Photograph by Andrew Harrer/Bloomberg

Today’s announcement that the U.S. unemployment rate unexpectedly fell to 5.9 percent in September is good and bad. The good part is obvious. The bad part is that it could mean the labor market is tightening up more than it should at this stage in the economic recovery. That would give inflation hawks at the Federal Reserve a reason to start raising interest rates, possibly chilling growth.

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