Low US unemployment unlikely to foster sudden wage growth – research
Fed projections see unemployment rate falling to 3.5% by the end of 2019
The ultra-low unemployment rate in the US is unlikely to trigger sharp wage increases, according to research published by the Federal Reserve Bank of San Francisco on January 14.
In Does Ultra-Low Unemployment Spur Rapid Wage Growth?, researchers at the San Francisco Fed Sylvain Leduc, Chitra Marti, and Daniel Wilson analyse whether at very low unemployment the wage Phillips curve becomes non-linear.
“A careful look at the wage Phillips curve across states yields little evidence supporting the
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