Monday Money Tip: Joblessness must come down if we are to loosen rates

Federal Reserve watcher Ray Stone notes that Friday's payroll data were "very solid," and set the stage for this summer's annual summit in Jackson Hole, Wyo., where central bank officials will debate the quality of the recovery in the labor market.

What does that mean for the rest of us? Interest rates rise - or not - based on whether Federal Reserve governors think the economy is picking up. If yes - and jobs growth supports this - rates could go up by mid-2015.

Federal Reserve chief Janet Yellen will take a microscope to these latest unemployment data as part of the debate. "She's pointed to these measures indicating the U.S. labor market is still troubled," says the cofounder of Stone & McCarthy research firm in Princeton. "And yet, we should be happy with the direction of things."

Yellen looks at the more-inclusive "U-6" unemployment rate, which includes people who have stopped looking for work - so-called discouraged workers. On Friday, the U-6 came in at 12.2 percent unemployment, improved from 12.7 percent in March.

But many new jobs are substandard, part-time positions. If the unemployment figure doesn't come down more, Yellen may decide to keep interest rates where they are.

We checked in with Andrea Kramer, managing director at private equity giant Hamilton Lane in Bala Cynwyd, to ask which investments she thinks are getting frothy and which are still opportunities. In particular, she says, the technology, energy, and consumer sectors are getting expensive, whereas the "boring" sectors such as industrials and manufacturing are not.

"There are a lot of things going into the frothiness - in particular, the opportunity to borrow and use leverage in the credit markets," she said. "But it's sector specific."

Hamilton Lane closed the $900 million Hamilton Lane Secondary Fund III LP fund in 2013.

215-854-2808