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Labor expenses for businesses rose at a slower pace in the second quarter as job cuts and the plunge in manufacturing and a slowdown in the rest of the economy restrained wages and benefits, a government report showed today.
Combining rising productivity with restrained wages causes the cost of producing goods and services to fall.
"Combining rising productivity with restrained wages causes the cost of producing goods and services to fall," she said.
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They suggest that April's Consumer Price Index (CPI) could be a blip (it follows several months of extraordinarily low inflation figures); they point to buoyant productivity, restrained wage costs and signs that the economy is slowing moderately of its own accord.
For a while women entering the labor force and other demographic trends restrained wage increases.
Second, as I've stressed throughout, the history of inflation in recent decades suggests that risk of overshooting is diminished, and even if we do, there's nothing wrong with slightly higher inflation (there is, of course, a problem with spiraling price growth, but the factors holding down inflation--anchoring by the Fed, global supply chains, restrained wage growth--lower that risk).
Since the 1990s Western firms have managed to restrain wages at home and boost efficiency.
The growth in stock options has also helped to restrain wages.
The influx has helped to restrain wages even as unemployment sank to historic lows of under 4%.
In 1947, he was almost sacked for criticising the Trades Union Congress in a pamphlet on the need to restrain wages.
Central bankers like to take the credit for the defeat of inflation, but emerging economies have given them a big helping hand, both by pushing down the prices of many goods and by restraining wages in developed countries.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com