Richmond Fed Chairman Barkin said the US economy could enter an era of prolonged labor supply restrictions. This situation will continue to put upward pressure on inflation and companies may have to pay more to attract and retain talent, he said.
On the 2nd the governor will hold a conference in Virginia. “Labor supply is likely to continue to be limited,” he said, according to a manuscript distributed in advance. “With Americans still saving about $1.3 trillion compared to pre-coronavirus pandemic levels and the ongoing fiscal stimulus, demand will continue to grow. The Fed’s efforts to restore balance will not be easy.” The manuscript was prepared ahead of the release of US employment statistics in November.
According to November’s US jobs statistics, the number of nonfarm payrolls increased by 263,000 from the previous month, beating market expectations. This suggests that labor demand continues to be strong amid solid consumer demand.
US jobs grow faster than expected, average hourly wages rise, puts pressure on the Fed (2)
Birkin cited the sharp decline in immigration, the complex situation caused by the pandemic and retirement as reasons for the labor shortage and said: “We are moving from an abundant work environment to a labor shortage. I am raising concerns about
“Financial authorities have taken aggressive action to curb inflation. “However, demand for labor continues to outstrip supply,” he said.
news-rsf-original-reference paywall">Original title:Barkin sees long-term labor constraints in the US will keep inflation in the heat(extract)