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The Federal Reserve noted in its recent FOMC minutes that wage growth and job conditions remain strong, but there are some signs that the labor market is softening.
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That’s a view that many economists share, saying that even though the latest nonfarm payrolls report blew out expectations, other data presents a picture of the labor economy moving closer to equilibrium.
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But the job market, and risk of a wage-price spiral, will keep the Fed on its toes as it considers just how much to tighten through more interest rate hikes.
The latest consumer and producer price data presented key evidence that inflation is easing, but the one key inflation read for the Federal Reserve that has not cooled off: wage growth. While recent CPI and PPI came in lower than expectations, and were received by the market with relief, the latest jobs report and wage growth data remain hot. How much of an issue is that for the Fed, and the markets?
The good part of the recent jobs data is the suggestion that maybe the economy can avoid a recession. The worst-case scenario: the wage-price spiral that some economists have feared since inflation starting taking hold over the economy becomes entrenched. We know the Fed is watching wage growth closely. But several top officials have said maintaining wage growth at a level that allows Americans to outpace inflation is the goal, and the Fed has not yet indicated it believes a wage-price spiral is in the evidence.
As FedEx Ground delivery drivers pay the price for soaring inflation and high diesel fuel prices, FedEx’s largest contractor sounded the alarm that at least one-third of the route system is on the brink of collapse.
“Really what I’ve been advocating and really making the public aware of is that we’re in enormous financial distress,” Route Consultant founder and president Spencer Patton told FOX Business’ Dagen McDowell on “Mornings with Maria” Friday.
“We’ve seen our fuel prices double in a year. We’ve seen our wage rates up, our vehicle costs up,” Patton continued, “and I’m sounding the alarm that the risk of network interruption in FedEx Ground is as high as I’ve ever seen it.”
Patton explained how FedEx Ground contracts out 100% of their network to about 6,000 small business owners who manage 10 to 25 employees on average.
People Are Sharing The Worst Examples Of Inflation They’ve Come Across So Far, And It’s Maddening
I’ve written a few posts on the topic of inflation so far and TBH, it never ceases to amaze me how much prices have increased on basically everything this year!
Disney Channel / Via giphy.com
I recently asked the BuzzFeed Community to share some of the worst examples of inflation they have come across so far. Oof, buckle up for some of these.
1.”In 2020, I bought a pack of 100 bobby pins for $5. I went to replace them last week and they are now $10.”
2.”Cat food was $16.99 a few months ago. It was $26.99 last week, more than 50% higher.”
—Anonymous
3.”The cost of a small load of laundry at my nearby laundromat in NYC is $6!”
4.”Cuban bread! A loaf of Cuban bread in my area has literally been $1 for the last 12 years and it’s now $1.50! I was so mad when I went to the store last week and saw the price. It may not seem much but I could always depend on that for when I didn’t have a lot of money because one loaf can feed three people in my family and having to fork out an extra 50 cents is so irritating.”
5.”Plane tickets. There is no reason on this green Earth why a BASIC economy plane ticket from Dallas to Chicago should cost $600. That’s bananas! When you look at the breakdown of the ticket you can even see that the fare itself is like $70 and the rest of it is ‘taxes and fees.’ It’s. All. A. Scam.”
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Here comes a flurry of retail bankruptcies, former retail CEO warns
Retailers on life support may go the way of the dinosaur in early 2023 should the economic slowdown cause a lackluster holiday shopping season.
“I think we will see a flurry of bankruptcies likely in the first quarter of 2023 if this holiday season is anything less than completely robust,” Mark Cohen, former longtime CEO of Sear Canada and current Columbia University professor of retail studies, warned on Yahoo Finance Live (video above). “I don’t think it will be, by the way.”
Retail bankruptcies — which picked up in droves at the start of the COVID-19 pandemic — have fallen by the wayside as consumers returned to stores to stock up on apparel and other items coming out of the pandemic.
If the Job Market Is So Good, Why Is Gig Work Thriving?
“Picking up shifts offers something that traditional permanent employment still generally doesn’t: the ability to work when and as much as you want, demand permitting, which is often essential to balance life obligations like school or child care.”
Yes, in this golden Biden era, people are taking second and third jobs to pay for gas and food.