The lack of pricing power, combined with
strong wage inflation, is a signal of further erosion in the profit outlook.
Not exact matches
Major central banks» 2 percent
inflation target appeared elusive as
wage growth hasn't caught up with a
stronger economy and jobs market.
Carpenter said
wage inflation in the U.S. is not far from where it should, even though many are puzzled that incomes have not caught up with a
stronger economy and tight labor market
She cut spending in the budgets to below the levels of
inflation plus population,
strong - armed teachers and doctors into taking
wage freezes.
The
wage pop [last Friday's 2.9 % growth in hourly wages] spooked the markets because investors, already skittish as valuations were a bit steep (though not as bad as people have been saying, given
strong current and expected corporate earnings), envisioned this sequence:
wage growth gooses price growth (i.e.,
inflation), which raises both market and Federal Reserve interest rates, which slows growth and shaves corporate profit margins.
Even the tame July
inflation numbers did little to reverse the unrelenting upward trend in core
inflation, and
wage inflation is still very
strong.
What I think is happening is a)
inflation expectations are extremely well - anchored b) the tight labor market is delivering some
wage growth but not a ton; worker bargaining power remains constrained c) though it has come down off of its recent peak, the dollar remains pretty
strong, and perhaps most importantly d)
wage growth isn't bleeding into price growth.
WASHINGTON (Reuters)- U.S. nonfarm productivity increased at its
strongest pace in 1-1/2 years in the second quarter, keeping
wage inflation subdued for now.
If unemployment continues to move down and job additions remain at anything close to the
strong pace we have seen over the past couple of years, we think it should translate into
wage inflation moving up.
In a sign of both
strong economic growth and the potential for higher
inflation, small businesses reported that
wage grew at the fastest rate in two years.
Also, the need for interest rates to rise will be lessened to the extent that
inflation expectations remain well anchored and
wage pressures in
stronger parts of the economy do not spill over to other parts.
Further, mortgages rates for 30 - year fixed, 15 - year fixed, and a 5/1 ARM are now close to 5 - year highs thanks to expansionary government policies, a
strong labor market, and
wage inflation.
Premier League clubs posted record profits last season thanks to
strong broadcast revenues and Financial Fair Play rules keeping
wage inflation under control, Deloitte has announced.
Premier League clubs have posted record profits last season owing to
strong broadcast revenues and Financial Fair Play rules keeping
wage inflation under control, according to data released by Deloitte today.
Wage growth was
strong on a statewide basis and above the
inflation rate in six of the 10 regional labor markets over the period.
In short, the RBA is not too confident that
wage growth will pick up and how the positive impact of
stronger wage growth will be on
inflation, which reinforces the idea that the RBA won't be hiking anytime soon.
With job and
wage growth now rising, the situation might be more one of
inflation, rising interest rates, and
strong housing starts.