Posts tagged wage-price
American workers are becoming less productive. That’s bad news for the Fed
June 16, 2023 // At its most basic level, labor productivity is a measure of the value of the goods and services produced by a company compared with the amount of labor used to produce that output. Productivity moves in the opposite direction to wages and so if it remains depressed, there will be upward pressure on labor costs — and ultimately on inflation, said Lisa Shalett, CIO of Morgan Stanley Wealth Management. That’s a big deal to Fed officials who have spoken publicly about their fears of a wage-price spiral — the feedback loop that drives inflation higher as people make more money and go out and spend it. “The crosscurrents for the Fed are complex. Big bets about the pace of the hiking path are ill advised,” said Shalett.