Federal Reserve Bank of Atlanta’s Post

Surprise strength in the labor market helped consumer wallets in January.⁠ ⁠ Wages, a closely watched indicator of inflation and a gauge of how much leverage workers have in the labor market, increased 0.6% on a monthly basis and 4.5% over last year; economists had expected wages to rise 0.3% over last month and 4.1% over last year.⁠ https://yhoo.it/4bhfGbb

Key US Inflation, Wage Measures Cool in Boost for Soft Landing US employment cost index posts smallest increase in two years Fed’s preferred inflation metrics moderate to 2021 pace Key measures of US inflation and labor costs cooled significantly in recent months, adding to growing optimism that the economy may be able to avoid a recession. The employment cost index, a broad gauge of wages and benefits, increased 1% in the second quarter, marking the slowest advance since 2021, according to Bureau of Labor Statistics figures released Friday. #business #finance #financialservices

Global market interest rates have surged due to wage data, causing a reassessment of Fed rate cut expectations. With cuts from the Bank of Canada and ECB, it is expected that the US rate reduction will be delayed. The Fed's policy announcement on Wednesday is likely to emphasize this. Today's calendar includes Italian industrial production and Eurozone investor confidence data. ECB members' comments will be monitored for clues on the next rate cut. In the UK, a summer rate cut is still possible depending on data, but wage growth remains above levels consistent with stable inflation. Tomorrow, the UK labor market report will provide insight into pay trends, following the rise in the National Living Wage. Sticky pay pressures are expected, but the unemployment rate may rise and employment may have fallen.

The rate of inflation exceeded the growth of wages for the first time in recent years in April 2021. In this month, inflation amounted to 4.2 percent, while wages grew by 3.2 percent. The growth of wages surpassed that of inflation for the first time since March 2021 in February of 2023. #jobs #itrecruiting #recruiting

Wages overtake inflation for first time in nearly two years. Average pay growth rose above inflation for the first time in almost two years, in a sign that the squeeze on living costs may be starting to ease. Wages rose at an annual rate of 7.8% between June and August, figures show. Want to read more? Click the link to read more 👇 https://lnkd.in/enHsVCRq #News #Finance #FinanceNews #Wages #Inflation

Can wage growth remain strong without putting additional pressures on prices? According to Boston Fed economists, the answer is yes, thanks to productivity improvements made during the COVID-19 pandemic. Read the new Current Policy Perspectives for more on why wage growth could remain strong without causing inflationary pressures: https://bit.ly/3RKSgCz

Very insightful comments & chart from Chen Zhao & Alpine Macro: "Is wage growth already too low for 2% inflation? You may think this is a crazy observation, but it is not. Many have mistakenly believed that wage growth determines the underlying inflation trend. This is wrong. It is not wage, but wage minus labor productivity growth, that determines where inflation goes. This Alpine Macro chart shows that the difference between private sector wage and labor productivity has plunged to 1.4%, suggesting that the underlying inflation could undershoot the 2% target next year." So we have yet even more evidence that the Fed far overreached on their rate-hiking. Look for rates to continue their slow, downward trend.

The US labour market was mixed in August. Payrolls expanded strongly by 187,000. However, the expansions in June and July were revised down heavily by 110,000. Average earnings increased softly by 0.2%/mth. The unemployment and underemployment rates spiked higher to 3.8% and 7.1% respectively. The ISM manufacturing index increased modestly more than expected though remains consistent with contraction.  USD can consolidate this week, with limited economic data to guide expectations for official interest rates. Two major events will bring volatility to Aussies. 1.    RBA policy meeting (Tuesday, 5th September) 2.    Australia GDP report(Wednesday 6th September) Otherwise,  AUD can remain sensitive to any Chinese policy announcements. #fx #internationalpayments #crossborderpayments #globalpayments #currency #IHFX

💰 Albert Marko on Wage Increases: "Listen, it's been 40-some years since the US worker has had a wage increase in reality." How are wages and inflation connected? Join the conversation in the full episode: https://lnkd.in/gi-UdVCp #WageGrowth 💼 #WeekAhead

GS: Measures of labor market tightness have broadly stabilized in recent months, but wages continue to grow at an annual pace of 4.5%, above the 3.5% rate that we estimate is compatible with the Fed’s 2% inflation target. This raises the question of whether further labor market softening is needed to slow wage growth.