Many financial analysts still believe the U.S. Federal Reserve will raise interest rates in September, despite recent market events. Pictured: U.S. Federal Reserve Board Chairwoman Janet Yellen speaks on Capitol Hill in Washington, July 16, 2015. Reuters/Mike Theiler

By Lucia Mutikani

WASHINGTON (Reuters) -- A small majority of forecasters are sticking to their guns and predicting the Federal Reserve will pull the trigger next week on the first U.S. interest rate increase in nearly a decade, even though market-based models suggest concerns about global market volatility and economic growth will delay monetary policy tightening.

A Reuters poll of 72 economists showed a slight majority expect an interest rate rise from the current 0-0.25 percent at the Sept. 16-17 policy meeting.

A smaller sample asked the probability of that happening gave just a 50-50 chance, down from a 60 percent median probability predicted in survey taken last month.

The chances of interest rates rising by end-December were put at a higher 75 percent, but down from 85 percent in the last poll, as recent global financial market volatility, triggered by worries of cooling economic growth in China, have lowered expectations.

"The improvement in the economy means that it is almost impossible to justify interest rates still being at near-zero," said Paul Ashworth, chief U.S. economist at Capital Economics.

"Nevertheless, a number of Fed officials clearly want to use the recent volatility in financial markets as a reason to delay the first rate hike yet again," he said.

Not only was next week's Fed policy meeting a close call, but the 39 economists polled who forecast a hike were almost evenly split on whether the Fed would stick to a range for the fed funds rate or move back to a point target.

The median forecast showed the fed funds rate ending the year at 0.375 percent compared to the current range of zero to 0.25 percent.

By comparison, based on CME fed funds rate futures prices on Friday, market expectations for a September rise in the fed funds target rate fell further to only 21.43 percent, from 23.57 percent Thursday and 45 percent a month ago.

Job openings hit a record high in July and the economy has added an average of 221,000 jobs per month over the past three months, far more than what is needed to keep up with population growth.

The unemployment rate, at a 7-1/2 year low of 5.1 percent, is into the range that most Fed officials think is consistent with a low but steady rate of inflation, and would likely bolster their expectations that a rise in wages will help lift inflation toward their 2.0 percent target.

Tightening labor market conditions have so far not spurred faster wage growth though, but economists are confident a pick-up in wage pressures is around the corner.

"We have an economic environment that warrants probably more than even just two rate hikes," said Jacob Oubina, senior U.S. economist at RBC Capital Markets in New York.

"The reality about wage inflation and inflation in general is that it doesn't follow a gradual uptrend," he said. "It shows up and when it does, it's hard to rein it if you don't have the wherewithal to do it."

The survey forecast the personal consumption expenditures price index, excluding food and energy, averaging 1.4 percent this year and accelerating to an average of 1.8 percent in 2016. Core PCE is the Fed's preferred inflation measure.

In the August poll, it had been forecast averaging 1.7 percent in 2016. The forecast for 2015 is unchanged from last month. A plunge in crude oil prices in June last year and a strong U.S. dollar have kept inflation muted.

The U.S. economy, which expanded at an annual rate of 3.7 percent in the second quarter, was forecast growing at a good pace for the rest of the year.

Gross domestic product growth was expected to average 2.5 percent this year, up from 2.3 percent in the August survey.

(Polling and analysis by Deepti Govind and Krishna Eluri; Editing by Chizu Nomiyama)