Analysis: Falling Unemployment Could Pressure Fed to Move Faster on Rates

The U.S. jobless rate hasn’t been this low since 2000

U.S. unemployment has fallen to 3.9% for the first time since 2000, shortly before the economy overheated. WSJ's Ken Brown explains what that tells us about today’s economic cycle and whether its sustainable. Photo: Associated Press

Friday’s jobs report illustrates the challenge the Federal Reserve faces this year as the economy enters a more delicate phase for setting interest-rate policy. It also shows why officials are split over whether to raise rates three or four times this year after raising them three times last year.

For the last several years, markets have watched monthly employment reports for signs that job gains would permit the Fed to gently raise interest rates.

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