While there’s been plenty of national news that is causing many Americans a great deal of stress, there is some good news to hold onto — the economy is showing continued growth in everything from consumer spending and job growth to manufacturing.
The New York Times reported that a series of data releases showed retail sales rose 0.4 percent in January (0.8 percent when auto sales are excluded), and the Consumer Price Index increased by 0.6 percent. The index is now up 2.3 percent over the last year, excluding food and energy, suggesting that inflation is now around the 2 percent mark that the Federal Reserve aims for.
The housing market is also continuing its recovery, with the number of permits issued for new housing units up 4.6 percent in January and increasing 8.2 percent from a year ago. And the Federal Reserve Bank of New York said its survey of business activity soared to its highest level in two years. In fact, more than 200,000 jobs were added in January, and the number of people filing new jobless claims each week has hit lows not seen since the 1970s.
With this new data, there are questions over whether or not the Federal Reserve will raise interest rates. In testimony this week, the Fed’s chairwoman, Janet Yellen, made it clear that an increase was on the way, though she wasn’t sure if it would happen at the Fed’s March meeting or later in the spring or summer.
While interest rates need to go up in an effort to keep the economy from overheating and inflation from taking off, doing it too soon could interfere with the economy’s recovery.
“Waiting too long,” Yellen told Congress this week, would not be ideal because it might require the Fed “to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession.”