July 13, 2017

WHEN THEORY MEETS REALITY:

US economy grows moderately but wage growth disappoints (Deutsche-welle, 7/12/17)

Fed members have been divided over the threat of inflation and the amount of slack in labor markets, even though unemployment currently sits at only 4.4 percent. Federal Reserve banks in San Francisco and St. Louis said the scarcity of workers had put upward pressures on wages. [...]

But those reports contrast with official figures, which showed a monthly increase in average hourly earnings of less than 0.2 percent in June, below analyst expectations. In the US, wages are considered a litmus test for whether economic growth actually trickles down to its citizens.

Disappointing wage growth in recent years has coincided with the slow pace of inflation, which currently sits at 1.4 percent, with little indication it will rise above the Fed's two percent target.

Labor has no value.

Posted by at July 13, 2017 8:44 AM

  

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