There are basically two camps. One we'll call the Larry Lindsey camp, which warns that wage pressures will be a big part of inflationary pressures in the months ahead. That scenario would likely force the Fed to tighten its policy stance, and hurt rate-sensitive parts of the market. Aggregate weekly payrolls, Lindsey notes, are already back up to 99.6% of last year's levels with nine million fewer people working. Wow.
Jefferies economist Aneta Markowska summarized it this morning: "We are not concerned" about the 0.8% month-on-month wage gain--which translates to almost 10% annualized--that showed up in the December payrolls report, she wrote. "We expect wage inflation toTheir base case is that wage inflation ends the year below 3%, a sharp contrast to the Lindsey camp and a deceleration from the over 5% rate currently.
Who needs wages when you have stimulus money and $tsla options...?
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