Wages one of the biggest conundrums for Fed - ING

Ross J Burland FXStreet

Analysts at ING noted that one of the biggest conundrums for the Federal Reserve is why haven’t wages responded to the sharp drop in unemployment?

Key Quotes:

"Admittedly there has been a major shift in the Phillips curve which may reflect the diminishing significance of manufacturing jobs."

"More people work in the less secure service sector where job changes are more frequent."

"Low productivity growth may be constraining pay awards, while technological advances could also be a factor."

"Higher wage growth is critical for stronger economic activity and for the Fed to reach its inflation target. Fed officials believe it is “only a matter of time”."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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