Bernanke and a majority of Fed officials predict that the surge in oil prices will lead only to a modest and short-lived increase in consumer prices as firms will have a very tough time passing cost increases on to consumers as slack in the labor market keeps wage increases to a minimum. Thus, inflation is playing the role of Elvis – plenty of possible citings, none confirmed.
Tag Archives: labor market
The Good, The Bad, The Ugly
The Good: Fed lifted its GDP forecast for ’11 to a 3.4% to 3.9% band from 3.0%-3.4% based on minutes from Jan meeting. The Bad: Ongoing frustration with slow progress in the labor market compelled the Fed to say that accommodative monetary policy is crucial. The Ugly: mortgage apps for home purchases fell 5.9% the week of 2/11 and down now in 6 of the past 7 weeks, and so far this year have sunk at a 68% annual rate
Household Employment
If you were to pick just 1 item out of yesterday’s jobs report that accurately depicts the labor market, given the inconsistent messages, it would be the Household employment # on a payroll and population adjusted basis. It came in at +153k in Jan; in line with the avg of the past 12 months. For bulls it confirms a labor market recovery; for bears it shows there’s no sign of acceleration in employment growth.