NEW YORK: Central bankers (click title to entry - thank you) around the world are at different stages when it comes to combating price pressures, but all of them are keeping a close watch on wages for early warning signs of future inflation.
Brazil's central bank last week expressed growing concern about above- inflation wage deals and said interest rates will remain high for a long time to counter the inflation threat.
In the United States, meanwhile, wages have been largely stagnant due to stubbornly high unemployment. That's one reason Federal Reserve Chairman Ben Bernanke thinks the oil-related jump in inflation will be fleeting and interest rates can stay at record lows....
...Average hourly earnings are expected to rise just 0.2 percent in April after being flat in March, hardly the stuff of an inflationary spiral.
"It's still very suppressed," said Slok. Without a pick-up in wages, he said, it is hard to see troubling inflation taking hold unless the U.S. dollar took a larger hit.
So far, there is no evidence higher prices have lifted wage demands, according to researchers at the New York Federal Reserve Bank.
The open question is how much pressure there will be on wages in the future once slack in the U.S. economy subsides, said Michael Gapen, an economist at Barclays Capital.
In the past couple of decades, inexpensive labor from emerging markets helped keep a lid on U.S. wage pressures, but those times may have changed....
Ya, think.
The chart below tracks with the alarming statistics regarding the average Pre-tax income. The 'median' wage for most Americans was $15 to $16 per hour. If the person is working a 40 hour work week that is a gross income of about $600 for that week. That amounts to about $30,000 per year, a little more maybe. Take away taxes and that is a relatively poor nation.
Now, how exactly is the USA suppose to recover its economy if the average citizen cannot purchase more than groceries, gasoline, housing and clothing? You want to tell me that? With falling wages in the USA, while recovering in Europe, where did all those Quantitative Easing funds go?
"The Fed" is not about the average American. It is about opening all possibilities to corporations increasing their bottom line. It did exactly that, what is not translating well into the USA economy is increased income and well being to the Middle Class. The USA Middle Class is disappearing because of out sourcing and cheap foreign labor markets.
What Mr. Bernanke is UNABLE to resolve is the fact that Americans are on a slippery slope of an economy because there is LITTLE to NO disposable income in this country anymore. None. It is the 'many pennies' of the Middle Class that drives the USA economy. When the Middle Class in the USA is exploited by speculators that Mr. Bernanke has buoyed all to well the purchasing power to expand the economy is shrinking at a fast and furious rate.
An Overview of U.S. Occupational Employment and Wages in 2009 (click here)
Brazil's central bank last week expressed growing concern about above- inflation wage deals and said interest rates will remain high for a long time to counter the inflation threat.
In the United States, meanwhile, wages have been largely stagnant due to stubbornly high unemployment. That's one reason Federal Reserve Chairman Ben Bernanke thinks the oil-related jump in inflation will be fleeting and interest rates can stay at record lows....
...Average hourly earnings are expected to rise just 0.2 percent in April after being flat in March, hardly the stuff of an inflationary spiral.
"It's still very suppressed," said Slok. Without a pick-up in wages, he said, it is hard to see troubling inflation taking hold unless the U.S. dollar took a larger hit.
So far, there is no evidence higher prices have lifted wage demands, according to researchers at the New York Federal Reserve Bank.
The open question is how much pressure there will be on wages in the future once slack in the U.S. economy subsides, said Michael Gapen, an economist at Barclays Capital.
In the past couple of decades, inexpensive labor from emerging markets helped keep a lid on U.S. wage pressures, but those times may have changed....
Ya, think.
The chart below tracks with the alarming statistics regarding the average Pre-tax income. The 'median' wage for most Americans was $15 to $16 per hour. If the person is working a 40 hour work week that is a gross income of about $600 for that week. That amounts to about $30,000 per year, a little more maybe. Take away taxes and that is a relatively poor nation.
Now, how exactly is the USA suppose to recover its economy if the average citizen cannot purchase more than groceries, gasoline, housing and clothing? You want to tell me that? With falling wages in the USA, while recovering in Europe, where did all those Quantitative Easing funds go?
"The Fed" is not about the average American. It is about opening all possibilities to corporations increasing their bottom line. It did exactly that, what is not translating well into the USA economy is increased income and well being to the Middle Class. The USA Middle Class is disappearing because of out sourcing and cheap foreign labor markets.
What Mr. Bernanke is UNABLE to resolve is the fact that Americans are on a slippery slope of an economy because there is LITTLE to NO disposable income in this country anymore. None. It is the 'many pennies' of the Middle Class that drives the USA economy. When the Middle Class in the USA is exploited by speculators that Mr. Bernanke has buoyed all to well the purchasing power to expand the economy is shrinking at a fast and furious rate.
An Overview of U.S. Occupational Employment and Wages in 2009 (click here)
