O, to raise or not to raise ... the Fed Funds Rate

The Bureau of Labor Statistics published its June numbers yesterday. As always, the markets are trying to gauge whether the economy is overheating or slowlying down, and what the Fed will do about it.

Aside from the figures that newspapers focus on, like the unemployment rate, non-farm payroll employment, inflation and the wage rate, I also like to look at the hours worked.

Here are the key numbers for me:
Unemployment Rate: 4.6%
Non-Farm Payroll: 121,000 (a drop from the 176,000 ave. in the first quarter)
Inflation: Unknown for June, but 4.1% in the 12 months to June
Wage Rate: Average earning up 8 cents in June and 3.9 percent over the past year.
Hours Worked: Up .4, from 104.6 to 105.0

As always, these numbers are like reading tea leaves. The lower payroll increase could suggest a slowing of the economy, but the wage rate creates inflationary concerns.

Inflation is running ahead of the wage rate. The lower non-farm payroll numbers combined with the hours worked suggests that executives may be adding extra hours rather than add permanent staff, due to lowered expectations for the future.

If I were Big Ben, I would raise the interest rate another quarter of a percent. The real interest rate is still low and he needs to prove his resolve to the markets. 121,000 new jobs is also nothing to scoff at, and the energy prices likely haven't fully worked their way into prices yet. Of course, he could get away with pausing right now as well, and that's what makes his job so damn fun.