America December employment statistics There was a lot of good news. For example, the number of employed people increased to 216,000, much higher than expected, and the unemployment rate remained at a very low level of 3.7%. Concerns that the U.S. economy will eventually start to slow appear to be unfounded so far.
Perhaps the most encouraging thing for those doing the work is that the situation is similar to that of the Federal Reserve. efforts to control inflation It is already having an impact where it matters, with wages once again rising faster than prices.
wages and inflation
At a December press conference following the Fed's decision to keep interest rates on hold, the Fed chairman said: Jay Powell told reporters. He said the strength in wages isn't all rainbows because he believes it's a factor that will make it harder for inflation to return to the Fed's 2% target.
But when earnings growth is faster than inflation, these are called “real” wage increases because workers feel like their pay is higher than before. This is reflected in the Consumer Price Index (CPI), which tracks prices offered to consumers; Indicators recommended by the Fedthe Personal Consumption Expenditure (PCE) index that tracks the prices consumers actually pay.
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“People are still living at high prices, and that's what people don't like,” Powell said last month. “So what happens is that real wages are now positive. With inflation falling, wages are now rising more than inflation, which helps people feel better. Maybe.”
It remains to be seen whether prices will continue their long-term decline. The CPI figures will be released next Friday (January 11th) and the PCE figures will be released a few weeks later on January 26th. The faster these indexes fall, the more The pressure felt by the Fed will increase. Start cutting interest rates again.