March 03, 2023 16:00 GMT
MNI: Wage Growth Still Inflationary, Fed Report Says
The booming U.S. job market is keeping wage growth above levels consistent with bringing inflation back to the Federal Reserve’s 2% target, the central bank said Friday in a semi-annual report to Congress.
“Bringing inflation back to 2% will likely require a period of below trend growth and some softening of labor market conditions,” said the report setting the stage for Chair Jerome Powell’s testimony next week. “Wage gains slowed over the second half of 2022, but they remain above the pace consistent with 2% inflation over the longer term.”
A hot streak of data on jobs and inflation for January tempered hopes for a more rapid dissipation of price pressures. (See MNI INTERVIEW: Fed Could Hike Rates More Than Expected)
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