Economy Watch: Ahead of Fed Decision, Long-Term Uncertainty on Interest Rates

Few economists or other observers expect the Federal Open Market Committee to raise interest rates at its meeting this week.

Few economists or other observers expect the Federal Open Market Committee to raise interest rates at its meeting this week, mainly because the data that the central bank uses to decide the question has been inconsistent since the rate hike late last year, the first one in nearly a decade. The larger question about interest rates is where they will go for the rest of the year. Even when the data is consistent, that’s hard to predict. The Fed is nothing if not opaque.

In the meantime, data continues to be variable. On Monday, the Bureau of Labor Statistics reported the reasonably good data that 28 states and the District of Columbia had unemployment rate decreases in January compared with December, eight states had increases, and 14 states had no change. Compared with January 2015, 37 states and D.C. had unemployment rate decreases from a year earlier, nine states had increases, and four states had no change.

That report came on the heels of a better-than-expected 242,000 jobs added during January, and a U.S. unemployment rate that held steady at 4.9 percent. The largest monthly increases in employment occurred in Florida (up 32,200 jobs), Texas (up 31,400), and North Carolina (up 23,200). The largest monthly decrease in employment occurred in Pennsylvania (down 16,100 jobs), followed by New Jersey (down 14,100) and South Carolina (down 10,100).

Despite the slump in energy prices, North Dakota and South Dakota still have the lowest jobless rates in the nation, the BLS said: 2.8 percent each in January, followed closely followed by New Hampshire, coming in at 2.9 percent. Mississippi had the highest rate at 6.7 percent, followed by Alaska, at 6.6 percent. Altogether, 16 states had unemployment rates significantly lower than the U.S. figure of 4.9 percent, 11 states and D.C. had measurably higher rates, and 23 states had rates that were not much different from that of the nation.