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Powell Sees Wage Growth Moving Up Strongly

FED
  • Powell asked about wage growth, he describes the situation:
    • "Wages have been moving up strongly, very strongly." Points to the ECI reading last Friday. Says in real terms they had been running a little below inflation, but "with the ECI reading it becomes close to back to zero in terms of the real increase".
    • Says it's "generally a good thing" but says "if wages were to be rising persistently and materially above inflation and productivity gains, that could ... cause employers to raise prices as a result." Says you could find yourself in "what we used to call a wage price spiral. We don't have evidence of that yet."

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