Rising wages could push the fed to raise rates

Mar 2012
New Hampshire
February's jobs report pointed to a slowing economy with one notable exception that could cause policymakers a headache later in the year.

Rising wages were one of the few positives to come out of the Bureau of Labor Statistics' monthly nonfarm payrolls release. While the economy created just 20,000 more jobs during the month, average wages for the nearly 157 million Americans at work rose 3.4 percent, the biggest increase since April 2009 and considerably above the 1.6 percent inflation level as measured by the consumer price index.

That's certainly good news following a lost two decades or so when real wages essentially were flat. But what happens if the jobs numbers stay soft even while wages continue to increase and a profits recession should hit corporate America?

Those kinds of conditions could put the Federal Reserve in a policy box — forced to try to control wage inflation even though real inflation as economists measure it has yet to really hit the broader economy. Fed officials of late have been indicating that they have no interest in raising interest rates until they get more of a look at how the economic numbers play out. Markets widely expect the Fed to hold the line on interest rates throughout the year, even though current Fed forecasts are for two.

Why rising wages could push the Fed toward more rate hikes yet
Nov 2013
20,000 jobs only.. that explains why our hypocrites on the right did not speak about the February jobs report here on PH.. their Prezzy starts to now revert the record-stream of job growth, probably now only a question of months until he has ruined Obama's legacy enough to have net job decrease again.
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Jul 2013
Nashville, TN
The Republican tax cut boom cycle getting ready to head into the traditional bust and destruction mode. #MAGA