Wall Street Journal (07/11/15) Ben Leubsdorf; Jon Hilsenrath

U.S. Federal Reserve chairman Janet Yellen has reaffirmed the central bank’s plan to increase short-term U.S. interest rates later in 2015, noting that there are tentative signs that wages are on the rise. “I expect that it will be appropriate at some point later this year to take the first step to raise the federal-funds rate and thus begin normalizing monetary policy. But I want to emphasize that the course of the economy and inflation remains highly uncertain, and unanticipated developments could delay or accelerate this first step,” she said on July 10.  

Although lower oil prices have harmed the domestic energy sector and the strong dollar has restrained exports, she said that those drags on the economy should fade “as the value of the dollar and crude oil prices stabilize,” and she forecast moderate economic growth over the course of this year. The jobless rate was 5.3% in June, near the Fed’s estimate of 5% to 5.2% for the normal long-run unemployment rate, but Yellen warned that “the lower level of the unemployment rate today probably does not fully capture the extent of slack remaining in the labor market.”

Wall Street Journal (07/12/15) Kathleen Madigan

Despite the U.S. Federal Reserve’s concerns about inflation being below its target for the last three years, consumers are seeing the costs of services rise every year. The overall inflation rate has held steady at less than 2% per year, but while goods prices dropped 3.3%, including food and energy, during the year-to-year period ended in May, service prices climbed 2%.

Experts attribute much of the gain in service inflation to an increase in rents, but service prices outside of rents are rising as well, which could suggest that the domestic economy has less excess capacity and labor-market slack than assumed. Service providers have more pricing power than goods producers due to lack of global competition, rising labor costs, and slower productivity, among other factors. “Wage pressure will show up first in the service category,” says Rajeev Dhawan, an economics professor at Georgia State University.

Wall Street Journal (07/13/15) Julie Jargon

In an endeavor led by coffee giant Starbucks Corp., over a dozen companies —including Microsoft Corp., CVS Health Corp., and Wal-Mart Stores Inc.—have teamed up to increase the hiring of young minority workers by 2018. The companies have pledged to hire 100,000, mostly low-income, 16-to-24-year-olds as interns, apprentices, and part-time and full-time employees in the next three years.