Despite economy’s boost, interest rates expected to hold

? A long time coming, the U.S. economy finally appears to be perking up. Growth over the summer sizzled. Even the downtrodden labor market is showing signs of life.

Just don’t tell Federal Reserve Chairman Alan Greenspan and his colleagues, who meet Tuesday to decide whether to change interest rates.

The central bank is widely expected to turn a blind eye to all the good news. Policy-makers do not want to spook jittery bond investors into thinking the faster growth will lead the Fed to start raising interest rates.

Economists predict no change in the benchmark federal funds rate, now at 1 percent, a 45-year low. They also expect Fed officials to continue to indicate it will be some time before they begin to consider raising rates.

“Clearly, the Fed is not going to be talking about hiking interest rates anytime soon,” said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis, Minn. “The Fed doesn’t want to do anything dramatic that would shock the markets.”

Normally, stronger economic growth would cause the Fed to think about nudging rates higher to make sure that increased demand for goods and services did not cause inflation to rise.

Many economists believe the economy raced ahead at an annual rate of 6 percent or better in the July-September quarter. If confirmed when the government releases the data on Thursday, that would be the fastest growth in the gross domestic product since late 1999.

Another sign of strength is the Fed’s latest survey of business conditions. It found that virtually every region of the country enjoying stronger growth.

Even the job market is on the upswing. Since early 2001, 2.7 million have lost their jobs during the recession and weak recovery.

Businesses added 57,000 workers to their payrolls last month after seven straight months of job cuts. Still, the September gain was far below the 100,000-plus monthly increases the economy showed during the boom years of the 1991-2001 economic expansion.