Economy

NY Fed finds record wage expectations in July consumer survey

Published

1 year ago

August 22, 2023

NY Fed finds record wage expectations in July consumer survey

By Michael S. Derby

NEW YORK (Reuters) – American workers’ expectations for pay surged in July, even as those same workers foresee a modestly less robust job market, said a survey released Monday by the Federal Reserve Bank of New York.

Respondents told the bank that they’d expect an annual salary offer of $67,416 upon being offered a job, a record reading in a survey that started in 2014, up from the $60,310 reported a year ago. “The increase was broad-based across age, education, and income groups, but was most pronounced for respondents above age 45 and for college graduates,” the report said.

Meanwhile, respondents to the bank’s Survey of Consumer Expectations said that the lowest wage they’d accept to take a job also jumped, hitting a record $78,645, from $72,873 a year ago.

The pay workers are expecting was not from what they’re actually getting. The survey said that survey respondents said that in July the average wage offered for a full-time job was $69,475 versus $60,764 in July 2022.

The jump in compensation, actual and expected, came even as poll respondents saw some softening around the edges of the job market. The survey found that relative to a year ago there’s been a small decline in those who said they’d changed jobs, as well as a reduction in the number of people who said they were searching for new work.

Looking ahead, respondents said the probability of them moving to a new employer stood at 10.6%, down from 11% in the July 2022 survey. Respondents also said they see the chances of receiving a job offer in the next four months as lower.

The New York Fed reports on labor market expectations quarterly as part of a data series best known for tracking the expected path of inflation and household financial situations. The latest data comes just days before Fed officials gather with other world top financial authorities at a research conference to be held in Jackson Hole, Wyoming.

Fed officials are continuing to grapple with whether they need to press forward with interest rate increases at a time when inflation remains high but is falling. Even with a historically aggressive campaign of rate rises economic growth and labor markets remain strong.

The New York Fed data suggests risks remain that wage gains and expectations of pay increases could keep some upward pressure on inflation, which could keep alive the prospect that the central bank may have to raise rates further

That said, there’s been an active debate over how much rising wages are a driver of inflation in a time where many other parts of the economy have been working through disruptions caused by the coronavirus pandemic.

A recent Cleveland Fed paper, noting the strong job gains, framed them as reactive to economic events, saying “ we find that the increase in wage growth largely reflects the pass-through of higher inflation and does not reflect labor market imbalances.” The paper’s authors expect wage gains to moderate.

Economy

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

Published

12 months ago

December 26, 2023

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.

The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.

Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.

“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.

Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.

“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.

The bank will next convene to set its benchmark rate on Feb. 16.

The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.

Economy

China identifies second set of projects in $140 billion spending plan

Published

12 months ago

December 25, 2023

China identifies second set of projects in $140 billion spending plan

© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo

SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.

With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.

The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.

China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.

The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.

“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.

The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.

($1 = 7.1315 renminbi)

Economy

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

Published

12 months ago

December 25, 2023

Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.

“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.

Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.

“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.

The bank will next convene to set its benchmark rate on Feb. 16.

The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.