Stephen Stanley Officials Quotations

Fed officials will remain watchful for a reacceleration in unit labor costs, especially with anecdotal evidence and an upturn in average hourly earnings growth suggesting that wage pressures may be picking up.

Fed officials have made clear that their heightened inflation concerns are related more to the outlook than the present situation. Thus, inflation fears have intensified even as core measures of prices have been exceedingly well behaved.

Productivity rises could be more modest going forward, since hours worked should grow faster as job losses caused by the hurricanes are reversed. Fed officials will remain watchful of a reacceleration in unit labor costs.

Clearly, Fed officials are more worried about the threatening things that they see (energy spike, eroding slack, etc.) than the benign core consumer price index readings.