Don Lee
December 2, 2015

Federal Reserve Chairwoman Janet L. Yellen, saying the U.S. economy has come a long way since the Great Recession, gave clear signals Wednesday that the central bank was likely to raise interest rates this month.

In a highly anticipated speech in Washington, Yellen said the Fed had made good progress in meeting its two objectives, maximizing employment and controlling inflation. Her remarks reinforced widespread expectations that policymakers would announce their first rate hike in nearly a decade at the end of their two-day meeting Dec. 15-16.

She cautioned, however, that there were still more economic data to be released before the Fed’s next meeting, most importantly the November jobs report this Friday. Analysts are expecting another month of solid job gains, near this year’s average of 200,000, and the jobless rate to remain at 5%, which many consider to be close to full employment.

A report Wednesday by the payroll firm Automatic Data Processing buttressed that forecast as its survey found that private sector employers had accelerated their hiring last month, adding 217,000 net new jobs. Separately, the Fed’s so-called beige book, an anecdotal report of economic activity nationwide, said that nine of the Fed’s 12 regional banks reported modest or moderate growth from early October through mid-November.

That is consistent with the “moderate pace” of economic growth that Yellen projected Wednesday for the foreseeable future. She said that should be enough to generate further gains in the job market and lift what has been an unusually low inflation rate over the last three years to the Fed’s 2% target.

“On balance, economic and financial information received since our October meeting has been consistent with our expectations of continued improvement in the labor market,” Yellen said at the Economic Club of Washington. “Continuing improvement in the labor market helps strengthen confidence that inflation will move back to our 2% objective over the medium term.”

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