Lackluster US Wage Growth Hobbles Fed on Interest Rate Hikes

Lackluster US Wage Growth Hobbles Fed on Interest Rate Hikes

Lackluster US Wage Growth Hobbles Fed on Interest Rate Hikes

Mohamed El-Erian, Allianz SE’s chief economic adviser, said l

Lackluster wage growth in the US to hobble the Fed in here and halt the raising interest rates.

The figure on pay is “disappointing,” Mohamed El-Erian said Friday in a TV inerview. “This will make the Fed less likely to hike in March,” he added. “It puts even more focus on structural measures to enhance wage growth.”

The US added 227,000 jobs in January, according to a US Labor Department report Friday, beating the median forecast of 180,000 in a survey of economists.

And the unemployment rate rose to 4.8%, indicating more Americans are coming back into the labor market to look for jobs, and worker pay edged up just 0.1% in the month.

The Fed gave no indication Wednesday on when it might tighten monetary policy, after leaving rates unchanged. Policy makers in December said they expect to hike rates 3X in Y 2017, not likely

US President Donald Trump won the election in November after campaigning on promises to improve the US economy with more jobs and better wages, a platform that was especially popular in blue collar regions that missed out on the prosperity of urban centers.

The stock markets are giving the Trump Administration the benefit of the doubt as investors wait to see how his staff will enact and oversee policies.

Have a terrific weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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