Unemployment Declines to 29-Year Low --- Pressure on Wages Remains Tame, Cutting Chances Of Rate Increase by Fed
WASHINGTON -- Good news concerning the U.S. economy continued last week as the October unemployment rate dropped a notch to its lowest level in 29 years and wage gains remained tame.</br></br>"Job growth was solid, but wage pressures were completely absent in October," said Bill Cheney, chief economist at John Hancock Mutual Life Insurance Co. "The inflation threat has receded yet again."</br></br>The new numbers, combined with some signs the economy may be slowing, will bolster those inside the Federal Reserve arguing against an interest-rate increase when policy makers meet Nov. 16.</br></br>The anemic growth in wages, in particular, gives Fed officials more breathing room to see whether the economy is slowing on its own, or whether growth can continue at the current pace without sparking inflation.</br></br>"The Fed will probably be on hold until March 21, 2000," said Rosanne Cahn, chief U.S. equity economist at Credit Suisse First Boston, describing what she calls "benign wage inflation." Still, many analysts think the Fed will move next week.