FOMC minutes: Labor market improvement can't be ignored

Many members say a range of labor market indicators had improved more in recent months than they had earlier anticipated, according to the minutes of the late July FOMC meeting. "The characterization of labor market underutilization might have to change before long, particularly if progress in the labor market continued to be faster than anticipated."

The committee voted 9-1 to maintain the taper and reiterate its commitment to keep rates lower than normal for longer. Dissenting was Philadelphia Fed boss Charles Plosser, who argued the others are underplaying the improvement in the labor market and the march of inflation towards the 2% target.

Comments (4)
  • 11146471
    , contributor
    Comments (1397) | Send Message


    Let the party continue!
    20 Aug 2014, 02:18 PM Reply Like
  • 6151621
    , contributor
    Comments (1172) | Send Message
    This doesn't indicate much change at all. Still dissent for quicker tightening for Plosser otherwise steady as she goes as everything is under control. Is this the voyage of the Titantic? It sure feels like it to me? The large ice berg is mostly underwater (aka out of sight). But this market will sink at some point. FOMC hubris guarantees it.
    20 Aug 2014, 03:04 PM Reply Like
  • mrdirt
    , contributor
    Comments (769) | Send Message
    Your paycheck has been shrinking for 5 years but the FOMC is seeing improvement in wages and the labor market is improving, what are these people smoking.
    More Americans are working and the unemployment rate is falling, but it sure isn’t showing up in workers’ paychecks.


    Since the Great Recession ended five years ago, the amount of money Americans earn each hour after adjusting for inflation has actually fallen. And that largely explains why the U.S. economy is growing just 60% as fast as it normally does.


    Hourly wages have risen about 10% overall since June 2009, to $24.45 an hour. But over the same span they’ve slipped 0.3% in “real” or inflation-adjusted terms.


    That means most families are just treading water.


    No wonder retail sales and purchases of other goods and services lag well behind the pace of consumer spending in the boom years of the late 1990s and early to mid-2000s. U.S. households simply don’t have a lot of spare cash lying around to splurge like it’s 1999.


    What’s surprising is that hourly wages remain stagnant despite a big uptick this year in the number of jobs created. Real wages have been flat for two straight months and they haven’t risen at all in six months...The lack of wage growth is the chief restraint on U.S. growth. The economy has historically expanded at a 3.3% annual pace, but the U.S. has only averaged about 2% growth since 2010.
    20 Aug 2014, 04:57 PM Reply Like
  • Morrison Marketing
    , contributor
    Comments (107) | Send Message
    Jokes, go back to your private islands and know that you can make it through another vacation before it falls apart.
    24 Aug 2014, 11:50 PM Reply Like
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