The Federal Reserve says that labor data will play a key role in its decision to raise interest rates or hit the pause button.
Many economists have been concentrating on the latest Employment Cost Index (ECI).
The Bureau of Labor Statistics (BLS) reported that the ECI rose 1% in the fourth quarter, down from 1.2% in the third quarter.
On a year-over-year basis, the ECI climbed 5.1%, up from 5% in the previous quarter.
But here is what the BLS says (emphasis ours)
“Inflation-adjusted (constant dollar) private wages and salaries declined 1.2 percent for the 12 months ending December 2022. Inflation-adjusted benefit costs in the private sector declined 1.5 percent over that same period.”
Once again, another month, another quarter of negative wage growth for workers.
If your employment is failing to keep up with the growing cost of living, how is this a strong economy?
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