US wages fail to rise despite ‘widespread’ labour scarcity

WASHINGTON: There are scant signs of inflation and wages for American workers remain stubbornly low despite ‘widespread’ labour shortages, according to a US Federal Reserve survey published Wednesday.

Growth in the world’s largest economy also continued nationwide between September and early October at a pace “split between modest and moderate” while temporary disruptions from Hurricanes Harvey and Irma persisted, according to the periodic Fed survey known as the Beige Book.

The Fed survey, which summarized anecdotal reports from business contacts on economic conditions across all 12 Federal Reserve districts, portrayed a continuing conundrum for central bankers.

Steadfast economic growth and job creation are failing to stir pay raises and inflation – circumstances which cast doubt on the pace of the central bank’s interest rate tightening.

“Many districts noted that employers were having difficulty finding qualified workers,” the report said.

“Despite widespread labour tightness, the majority of districts noted only modest to moderate wage pressures.”

Fed members are sharply divided over the dangers of inflation and a vocal minority argue the central bank should hold off raising interest rates and allow job creation to continue until signs of inflation occur. — AFP