On Friday’s broadcast of CNN International’s “First Move,” CNN International Business Correspondent Rahel Solomon said that the imbalance between job openings and people looking for work “creates a vicious cycle, and it makes the job of the Fed trying to fight inflation much harder.” And that wage gains are “being outpaced by inflation.”
Solomon stated, “[A]ny other time you see a jobs report like this and it really just sort of spells a really strong economy, really red hot labor market. But in an environment where inflation is at 9.1%…well, it sort of adds an asterisk to that jobs report. … So, the complicating factor about all of this is the demand for workers and wages. Right now, Julia, there are 1.8 open jobs for every one person looking. When you have that kind of imbalance, it creates upward pressure on wages, right? I mean, just think about it. Companies have to incentivize people to work for them, because there is such demand for workers. And so, they raise wages to try to incentivize workers. And while that is great for American workers, well, first of all, that’s being outpaced by inflation. But that then trickles down into higher prices, and it creates a vicious cycle, and it makes the job of the Fed trying to fight inflation much harder.”
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