Federal Reserve Faces Concerns Over Labor Supply and Wage Growth

According to Odaily, Pantheon Macroeconomics analyst Samuel Tombs has indicated that the Federal Reserve may soon be concerned about an 'excess supply of labor and undesirably weak wage growth.' Tombs noted that the unexpected increase in job vacancies in the November JOLTS report suggests that employment costs are cooling. He highlighted that the quit rate has decreased from 2.1% to 1.9%, 'indicating a more significant slowdown in employment cost growth.' Consequently, the average hourly earnings growth of 0.4% for two consecutive months appears to be noise around a still-slowing trend. Tombs anticipates that the December non-farm payroll data, set to be released on Friday, will show a slowdown in average hourly earnings.