The Federal Reserve has two objectives: minimize inflation and maximize employment. It pursues these goals at Federal Open Market Committee meetings \u2014 one of which will happen in a little over a week \u2014 where it can tinker with the interest rate. <\/p>\n
While the Fed might not raise interest rates at this meeting, it will certainly have to do so eventually to combat inflation. September\u2019s inflation data showed that over the last year, the consumer price index rose 3.7%<\/a>, the producer price index rose 6.3%<\/a>, and the importer price index rose 8.1%<\/a>.<\/p>\n But while higher interest rates can help fight inflation, they also impact the labor market. Recently, the Fed hasn\u2019t been quite so focused on jobs, though.<\/p>\n \u201cThe thing I\u2019ve been telling people is just that the labor market is actually, frankly, quite boring right now,\u201d said Preston Mui, senior economist with the advocacy group Employ America.<\/p>\n Mui pointed out that boring isn\u2019t bad. <\/p>\n \u201cThere are parts of it that are sluggish, such as wage growth<\/a> and hiring<\/a>,\u201d Mui said. \u201cBut we\u2019re not seeing any sort of imminent collapse either. And so I think that\u2019s why the Fed feels comfortable shifting its focus towards inflation.\u201d<\/p>\n If the Fed raises rates, some industries are likely to shed jobs \u2014 like housing. Courtney Shupert, an economist at MacroPolicy Perspectives, said that higher mortgage rates discourage new buyers.<\/p>\n \u201cSimultaneously, homebuilders face higher financing costs, which results in less construction activity, and less hiring in that sector,\u201d Shupert said.<\/p>\n Shupert said that companies that use a lot of temp workers are likely to shed them as rates go up.<\/p>\n \u201cWe\u2019ve already seen temp jobs slow slightly \u2014 they lost 11,000 jobs in the month of September,\u201d she said. \u201cBut I would expect that to potentially slow a bit more, just in reaction to the higher interest rates.\u201d<\/p>\n