Fed keeps 2 percent interest rates

The Federal Reserve decided to keep the federal funds rate at 2 percent, as the country faces a sluggish economy with rising inflation. 

Economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports. On the other hand, financial markets continue to struggle. Other factors influencing the decision were related to tight credit conditions, the ongoing housing contraction, and elevated energy prices, which are likely to weigh on economic growth over the next few quarters, according to the Fed’s August 5 press release.

Jobless rates highest in 4 years

The country’s unemployment rate reached its highest level in four years, for July. Unemployment climbed to 5.7 percent from 5.5 percent, as employers cut 51,000 jobs. Particularly, jobs in the manufacturing, construction and service providing industries were cut.

Analysts suggest some employers are cutting jobs because of the weighing high energy prices and existing housing situation. The Labor Department released its monthly Employment report Friday, August 1.

Read more at the US Department of Labor.