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Focus Returns to Inflation

By Matthew Kerkhoff

 

Last week’s employment figures show that this economic expansion still has room to run. Jobless claims remained subdued, while net job gains came in above trend. Markets initially discounted this information as a further sign the Fed is on track to raise rates, but remarks from Fed Vice Chairman Stanley Fischer today suggest that a rate hike may not be imminent.

 

According to the Labor Department, the US economy added 215,000 jobs during July, while the unemployment rate held steady at 5.3%.

 

These gains mark the 58th straight month of job growth, which is the longest stretch on record.

 

 

Average hourly earnings rose 0.2% in July, and are up 2.1% over the last year, in line with previous readings. The lack of accelerating wage growth is a sign of continued slack in labor markets. Rising wages are important because they are viewed as a precursor to rising inflation.

 

While wages have shown only ... Log in or subscribe to continue reading.


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