Hatzius Sees Little Pent-Up U.S. Wage Deflation Yellen Cited – Bloomberg 08-27-14

Salient to Investors:

Jan Hatzius at Goldman Sachs said:

  • There is little evidence of the “pent-up wage deflation” that Yellen cites as a possible reason behind the slow increase in earnings and says the opposite was true, with the areas having below-average wage growth during the recession now showing above-average acceleration. “Pent-up wage deflation” holds that wages did not fall enough during the past recession because employers refrained from cutting pay in order to maintain employee morale.
  • The continued weakness of wages signals continued labor market slack
  • The employment cost index is a less noisy measure than other gauges such as the average hourly earnings data.
  • Goldman economists expects the Fed to start raising rates in Q3, 2015, agreeing with a Bloomberg median economist forecast.

 

Read the full article at http://www.bloomberg.com/news/2014-08-27/hatzius-sees-little-pent-up-u-s-wage-deflation-yellen-cited.html

Click here  to receive free and immediate email alerts of the latest forecasts.