We’re heading into the final stretch of 2016 and there just might be a green light for a  rate increase by the Fed at their December meetings. The Unemployment Report released today showed a Should You Form an LLC?slight decrease in the headline rate from 5.0% to 4.9% but analysts are not paying much attention to that number. The round of FOMC meetings held this week didn’t provide much detail but the board did keep rates the same. The Fed has been reluctant to make any such move without a continued series of positive economic data. Well, today’s release they got some but they had to look past the tepid job growth of just 161,000 new non-farm payroll jobs.

 

The Fed has been waiting for hard data on wage gains and in October, wages rose more than at any time since the recovery started, an indication the labor market is tightening as employers are faced with paying higher wages to attract more workers. A rate increase in December would be just the second such move in 10 years. According to the data, wages rose 0.3 percent last month for an annualized number of 2.8 percent year-over-year.

More money in consumer’s pockets typically means more spending which then suggests a growing economy. Buying more goods will then begin a gradual uptick in GDP, perhaps even getting the number past 3.0 percent. Yet even with a rate increase in December, job growth has still been on the slow side which could mean not only will the Fed stand pat for at least two more quarters of data in 2017 but an economy that won’t exactly be running to the finish line.