The Atlanta Fed's macroblog provides commentary and analysis on economic topics including monetary policy, macroeconomic developments, inflation, labor economics, and financial issues.
- BLS Handbook of Methods
- Bureau of Economic Analysis
- Bureau of Labor Statistics
- Congressional Budget Office
- Economic Data - FRED® II, St. Louis Fed
- Office of Management and Budget
- Statistics: Releases and Historical Data, Board of Governors
- U.S. Census Bureau Economic Programs
- White House Economic Statistics Briefing Room
November 20, 2006
Worrying About Inflation
What worries you most: That the immediate future will bring slower than desired growth or higher than desired inflation? If you answered "inflation", you are not alone. Here's what the world's finance ministers and central bankers had to say after putting their heads together this past weekend:
G-20 members noted that the world economy continues to expand at a solid pace, with growth above its long-term average for the fourth consecutive year. The outlook remains positive. Global economic growth is expected to slow slightly from the rapid pace of the past few years... Above average growth in the global economy has seen spare capacity decline which, combined with buoyant energy and mineral prices, has increased the risks to inflation.
Maintaining strong world growth and containing inflation will require ongoing adjustments to monetary and fiscal policies while ensuring appropriate exchange rate flexibility and structural reform.
And then there is this, from Bloomberg:
Accelerating wage growth around the world is making central bankers less willing to cut interest rates than some investors expect. The concern: The increasing labor costs may trigger a renewed rise in inflation even as energy prices abate.
"Wages are creeping up,'' former Federal Reserve Chairman Paul Volcker told the Concord Coalition, a fiscal-policy watchdog group, in New York Nov. 14. When it comes to inflation, Volcker said, "we're a little bit on the edge.''
In the U.S., unit labor costs rose last quarter at the fastest pace in almost 25 years. Germany's largest steelmakers, ThyssenKrupp AG and Salzgitter AG, are giving workers their biggest pay raise in more than 10 years. New Zealand wages increased at a record pace in the third quarter.
There's more to come. The International Monetary Fund expects unit labor costs at manufacturers in advanced economies to chalk up their biggest increase in six years in 2007...
ECB President Jean-Claude Trichet told reporters today central banks shouldn't be "complacent'' about inflation risks...
"The main risk to the inflation outlook in the medium term surrounds the behavior of pay growth,'' Bank of England Governor Mervyn King told reporters in London Nov. 15.
The article does note that there is controversy about how well labor costs predict inflation, but the general message is pretty clear: If you ask the world's policymakers what is making them itchy at the moment, the answer is the prospect of too high inflation, not too little economic growth.
TrackBack URL for this entry:
Listed below are links to blogs that reference Worrying About Inflation :
- Digging into Older Americans’ Flat Participation Rate
- What the Wage Growth of Hourly Workers Is Telling Us
- Making Analysis of the Current Population Survey Easier
- Mapping the Financial Frontier at the Financial Markets Conference
- The Tax Cut and Jobs Act, SALT, and the Blue State Blues: It's All Relative
- Improving Labor Force Participation
- Young Hispanic Women Investing More in Education: Good News for Labor Force Participation
- A Different Type of Tax Reform
- X Factor: Hispanic Women Drive the Labor-Force Comeback
- Tariff Worries and U.S. Business Investment, Take Two
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- Business Cycles
- Business Inflation Expectations
- Capital and Investment
- Capital Markets
- Data Releases
- Economic conditions
- Economic Growth and Development
- Exchange Rates and the Dollar
- Fed Funds Futures
- Federal Debt and Deficits
- Federal Reserve and Monetary Policy
- Financial System
- Fiscal Policy
- Health Care
- Inflation Expectations
- Interest Rates
- Labor Markets
- Latin America/South America
- Monetary Policy
- Money Markets
- Real Estate
- Saving, Capital, and Investment
- Small Business
- Social Security
- This, That, and the Other
- Trade Deficit
- Wage Growth