On CNN International’s “First Steps,” which aired Friday, CNN International business correspondent Rahel Solomon said the imbalance between job openings and jobseekers “created a vicious cycle that makes the Fed’s efforts to fight inflation tick. More difficult.” Wage growth “overtaken by inflation”.
Solomon said: “[A]Anytime you see a jobs report like this, it’s really just sort of an indication that the economy is very strong and the labor market is very hot. But in an environment of 9.1% inflation…well, it kind of adds an asterisk to that jobs report. …So the complicating factor in all of this is the demand for workers and wages. Now, Julia, everyone has 1.8 open positions. When you have this imbalance, it puts upward pressure on wages, right? I mean, think about it. Companies must incentivize people to work for them because there is such a demand for workers. So they raise wages in an attempt to motivate workers. While that’s great for American workers, first, inflation outpaces that. But that then gradually drives up prices and creates a vicious circle that makes the Fed’s job of trying to fight inflation more difficult. “
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