Poor Productivity

poor productivityWhile labor productivity growth has been dismal since 2011, so has wage growth. But if wages start to increase more rapidly, that would push up costs and prices, and that would stoke inflation and push the Fed to raise rates more quickly. This is why the Fed is looking to raise rates in July. But low productivity growth limits GDP growth and that means rates can’t rise very much either.

Share This Post
Facebook Twitter Email

Speak Your Mind


This site uses Akismet to reduce spam. Learn how your comment data is processed.