On Friday’s broadcast of CNN’s “At This Hour,” New York Times Federal Reserve and Economy Reporter Jeanna Smialek stated that while the September jobs report is “a baby step in the right direction.” Things are “still too hot” for the Federal Reserve’s liking and the labor market is “still a recipe for higher inflation over time. And so, I think from Chair Powell’s perspective, the Fed Chair’s perspective, this is still bad news.”
Smialek stated that the Federal Reserve probably sees the jobs report as “still too hot for comfort. This is…a baby step in the right direction. But it is not the whole way. We are still adding jobs at a pace that is much higher than the actual sort of underlying growth in the economy can sustain. We’re still seeing very rapid wage gains. And when you think about that, just what it means from a company’s perspective, if you’re paying your workers more, you’re going to continue raising prices at an abnormally rapid pace. And so, even though those wage gains aren’t keeping pace with inflation for most employees, this is still a recipe for higher inflation over time. And so, I think from Chair Powell’s perspective, the Fed Chair’s perspective, this is still bad news.”
Follow Ian Hanchett on Twitter @IanHanchett