Under this pressure, companies face a special challenge: They're striving to perform at a higher level with a shrinking pool of available workers.
Wage growth has remained stuck at around 2%. QE should have tightened the labour market – by leading to more people being hired – and then increased wages as firms fought over a dwindling pool of available workers.
Being able to draw on a larger pool of available workers improves the quality of labour, reduces the risk of shortages and raises demand, not least for goods and services that will make a working woman's life easier: labour-saving devices, convenience foods, meals out, child care.
Companies may also be investing less in technology than they otherwise would do as a result of the wide pool of available workers.
The committee, the statement said, "remains concerned about the risk of a continuing gap between the growth of demand and potential supply at a time when the utilization of the pool of available workers remains at an unusually high level".
Nonetheless, the committee remains concerned about the risk of a continuing gap between the growth of demand and potential supply at a time when the utilization of the pool of available workers remains at an unusually high level.
Nonetheless, signs that growth in demand is moving to a sustainable pace are still tentative and preliminary, and the utilization of the pool of available workers remains at an unusually high level.
Signs of moderating growth "are still tentative and preliminary, and the utilization of the pool of available workers remains at an unusually high level," the committee said in a statement released at the conclusion of a two-day meeting.
On the other hand, the statement said, "utilization of the pool of available workers remains at an unusually high level," and higher oil prices pose "a risk of raising inflation expectations".
"The utilization of the pool of available workers remains at an unusually high level, and the increase in energy prices, though having limited effect on core measures of prices to date, still harbors the possibility of raising inflation expectations," the committee said in a statement.
Assuming that the nation's pool of available workers continues to show a decline, Mr. Greenspan said, "wage increases must rise above even impressive gains in productivity".
