For the first time in a while, American workers are truly doing fairly well:
U.S. businesses are facing a problem that many haven’t thought about in years—rising wages. That could be one factor that tips over a market that has the uncomfortable combination of declining earnings and high valuations.
Workers, for the first time since the financial crisis, are demanding raises and actually getting them—or they are walking. The number of workers quitting jobs has increased, a sign they are confident they can get new jobs, and companies are loathe to lose good workers. It now takes 27 days to fill a job, the highest since at least 2001.
….“More revenues are going into the pockets of workers,” said Brian Schaitkin, a senior economist at the Conference Board, a corporate-research organization. “Higher wages are going to place downward pressure on corporate profits.”
Uh oh. Downward pressure on corporate profits. Must be time for the Fed to raise interest rates and put a stop to this nonsense. After all, inflation has skyrocketed recently to…about 1 percent.1 Put that together with actual wage gains for workers and we’re in a heap of trouble. Something must be done quickly.
1Yes, yes, I know the Fed actually uses core PCE as its preferred measure of inflation. But that’s pretty low these days too. And inflationary expectations are also low. Really, inflation just isn’t a big worry at the moment.