Posted on 03/02/2023 7:27:03 AM PST by Kaiser8408a
Despite Treasury Secretary Janet Yellen claiming that inflation was only transitory and likely to disappear, we are seeing continued inflation. Now we see that Unit Labor Costs are up 3.2% QoQ for Q4 2022.
Even worse, US unit labor costs rose 6.5% on a year-over-year (YoY) basis, the WORST since 1982.
And yes, Q4 2022 unit labor costs are up 2x the expectations.
In normal times, The Federal Reserve would raise rates to cool down the economy. The Taylor Rule suggests a Fed target rate of 10.59% versus the current Fed rate of 4.75%. A long way to go!!
Damn it, Janet!
(Excerpt) Read more at confoundedinterest.net ...
http://www.shadowstats.com/alternate_data/inflation-charts
YoY!
Large population states have created high minimum wage laws.
Wage inflation is the most pernicious and is moving through the whole economy.
I take issue with the author just a bit. He says that in normal times the Fed would raise interest rates to cool off the economy. Well that is not exactly true. Raising rates usually does have the effect of cooling off the economy, but that is not the reason they do it. Inflation is caused by an overly large money supply. Raising rates decreases demand for loans, thereby reducing the monetary multiplier effect and thus reducing the money supply.
Saying the Fed raises rates to cool off the economy is kind of like saying the doctor uses the defibrillator to make the alarms stop beeping. It does that, but that isn’t the real purpose.
Saying the Fed raises rates to cool off the economy is kind of like saying the doctor uses the defibrillator to make the alarms stop beeping. It does that, but that isn’t the real purpose....
roflmao post of the day!
crummy little french fry workers are still asking for outrageous hourly pay rates and as long as companies need bodies they have to pay it. There should be a minimum wage for full time vs part time workers. Most food service places do not need many full time workers, this would save a ton of money and cool some inflation
High rates also pull excess dollars out of the economy as they get a better return accruing interest as opposed to other uses.
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