The job market is not where it used to be and the signs are in weak hiring and low consumer prices. After the release of data on Thursday, it has led some economics to predict that the Federal Reserve will announce some new step next week to revive the economy.
According to the New York Times, applications for unemployment benefits rose last week, which reflects a fourth straight month of sluggish hiring in June.
There has been weak job growth and this places a lot of pressure on the Federal Reserve because part of its mission is to increase employment. The policy-making committee of the Federal Reserve plans to meet next Tuesday and Wednesday.
Fed officials are "likely to go into that meeting feeling a little chastened and looking for a way to support the economy," said Jeremy Lawson, an economist at BNP Paribas.
Despite being mentioned at the Fed's April meeting that the economy would grow by about 2.7 this year, economists are predicting slower growth after seeing the economy slump this spring.
According to the Labor Department, weekly applications for unemployment benefits increased to a seasonally adjusted 386,000. The four-week average of jobless claims rose for the third straight week to 382,000; that is the highest in six weeks.
Apparently, a 6.8 percent drop in gasoline prices may have contributed to the 0.3 percent decline in the Consumer Price Index in the month of May.
"Over the last 12 months ending in May, consumer prices rose 1.7 percent, much less than April's pace. It is also below the Fed's goal of a 2 percent annual gain," as stated in the New York Times.
