Long Term Perspective
When the economy is operating at full throttle, a falling unemployment rate frightens policy-makers as they anticipate that rapidly rising wages will turn into runaway inflation. In fact, wage growth did begin to accelerate in 1995, and peaked in 1998.

Short Term Perspective
The jobless rate increased 0.3 percentage points to 5.7 percent in November and stands at its highest rate since the end of 1996. This may not have surprised Fed officials, but will likely keep them on edge for several more months (and poised to lower rates) as they worry about economic conditions. Wage growth moderated significantly in November.