Solid Job Growth But No Inflation

Published 01/11/2015, 02:45 AM
Updated 05/14/2017, 06:45 AM

The December employment report showed job growth of 252,000 and net revisions to the figures for the two previous months of 50,000. Despite the solid gain in employment, wage inflation continues to disappoint. With the unemployment rate closing in on the Fed's estimated long-term unemployment rate of 5.2% to 5.5%, we believe that our call for a first rate hike at the June meeting remains fair. However, the limited wage pressure leaves the Fed room to be patient on the pace of rate hikes, as it suggests that the NAIRU is probably closer to the lower end of the range.

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