The good news: the US economy added about 211,000 jobs in November, better than expected.
The somewhat good news: wage growth was positive, but only 2.3%.
The expected result: the US Fed will finally raise interest rates.
The worry: wage growth needs to accelerate to warrant a rise in interest rates. Wage growth would be a sign of inflation, which is considered good as long as it is only about 2.5%. If wage growth stagnates, and if we are really on the cusp on deflation instead, then raising interest rates is the opposite of what needs to be done. Unfortunately, one tool to counter deflation is lowering interest rates, and the Fed has already dropped them to an uncomfortably low level.
More people working is a good thing. If wages don’t rise, income and wealth inequality won’t shift, savings won’t increase, and other crises like retirement won’t be resolved. But, at least more people are working.
(Click on the photo for the link.)