US Fed rates rise gets closer

The strong May employment report has probably eased the US Federal Reserve closer towards raising short-term interest rates later this year.

But Fed officials are reported to be unlikely to move at their policy meeting this month because they want to see more evidence of a solid economic expansion. They indicated before the job report on Friday that they had moved into a “wait-and-see” stance ahead of the June 16-17 meeting

The Fed may, however, draw comfort from retail sales figures if, as forecast, the data confirms the solid economic growth that the May jobs report suggested.

The US Commerce Department will deliver its report for May’s retail sales on Thursday. A strong month for vehicle sales in May and better weather should have lifted spending at a variety of stores last month, economists say.

“We are expecting there to be improvement across the board,” said Sam Bullard, senior economist at Wells Fargo Securities.

Sources: Dow Jones and Market Watch