The Fed were bullish during their last meeting and pretty much sent a clear signal that the interest rate will be going higher this year. Most of the indicators which show the front end of the economy are confirming that the situation hasn’t deteriorated, but actually, it has improved on many scales.
The general consensus in the market is that the rate hike will take place in September. But, everything still remain very much data dependent and the upcoming US NFP data plays an important role in this equation. Moreover, if the rates are going to go high in September then it means that we have two more jobs due before that time frame.
Generally speaking the unemployment data has shown that steady pace of decline in the unemployment rate remains intact since late 2009. Over this period, the unemployment rate has fallen nearly one percentage point in every single year and given how the economic picture is looking today, it looks highly unlikely that this situation will change any time soon.
We do know that the unemployment rate averaged nearly 6.2% during the second quarter of 2014, so we are anticipating that this rate may fall further in the coming days.