US Federal Reserve Chairman Jerome Powell has decided to put Americans’ salaries at the center of US monetary policy in 2023. About informs The Economic Times newspaper. Powell described Americans’ salaries as the key to understanding inflation in the country.
Powell says he’s looking for a price range for 2023 that covers everything from medical care and haircuts to a night out at a roadside motel.
“Since wages are a particularly high cost for service industries, the labor market is key to understanding inflation in this category,” Powell said.
According to him, wages are rising “well above what would correspond to 2% inflation”.
As the paper points out, the key question for Fed officials is whether the rise in U.S. wages over the past 18 months is a one-time signal (as companies adjust to workforce shortages and realize that their workforce is under-compensated) or harmful. feedback loop in which prices and wages push each other up.
Earlier, the US Bureau of Labor Statistics reported that in the second quarter of 2022, wages of private sector workers in the US rose 5.7%. In the first quarter, this figure was 5%. Inflation in the US rose to 8.5% in March. In November 2022, consumer prices (CPI) in the US rose 7.1% year-on-year, the country’s Department of Labor reported.
Source: Gazeta
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