Ellen Zentner: Without Wage Growth Can’t Get Runaway Inflation
Ellen Zentner, economist at Nomura Securities, was interviewed by Adam Johnson and Sara Eisen on Bloomberg Television’s “Street Smart” regarding the jobs report and the outlook for the U. S. economy.
Zentner said that in 2012 jobs added per month averaged 150,000, the exact same number as in 2011.
Zentner commented on the surprising growth in wages in last month’s report. However, in inflation adjusted terms, wage growth was flat in 2012, she said. Zentner explained there is growth in the health care sector, but they aren’t high wage jobs.
Zentner stated the Fed can remain comfortable in its outlook that inflation will remain tame. The Fed can continue its policy of extraordinary stimulus because you can’t get runaway inflation with low wage growth.
The interview continued with Zentner commenting on the effect of the end of the payroll tax holiday on disposable income.