Sustaining Inflation Wage Without Influential High Is Difficult, Goldman Economist!

Jan Hatzius told CNBC on Tuesday that the pace of wage increases in the United States must slow as inflation picks up, becoming a key focus for the Fed and markets alike.

The quarterly annualized wage growth rate has been "well above" 4% over the past two quarters, said Hatzius, who is also head of global investment research at Goldman Sachs.

it has to go down,” added Hatzius. Goldman Sachs' chief economist said it would be difficult to sustain wage increases of 5% to 6% without causing "significantly high" inflation.

Jan Hatzius told CNBC on Tuesday that as inflation rises, the pace of US wage increases must slow and become a key focus for the Fed and markets alike.

“I think 4% is fine. 5% to 6% is probably difficult to sustain without significantly higher inflation, so it needs to be brought down,” Hatzius added.

The annualized quarter-over-quarter wage growth rate was "well above" 4%, said Hatzius, who is also head of global investment research at Goldman Sachs.

I'll probably have to slow down a bit," he told CNBC's "Squawk Box Asia." January.

Earlier this month, Goldman Sachs CEO David Solomon said “there is real wage inflation everywhere”.

Compensation costs at Goldman rose 33% to $17.7 billion for 2021, a whopping $4.4 billion increase driven primarily by performance pay increases, executives said.

Meanwhile, inflation is picking up and the US consumer price index rose 7% in December, the fastest rate since June 1982.

These higher consumer prices are weighing on wage increases for workers despite their pay rises.

In fact, the average worker has taken a 2.4% pay cut over the past year, according to seasonally adjusted data released by the Labor Department.

The top six U.S. banks -- JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley, and Goldman Sachs.

Since raised some salaries in 2021 and then raised spending forecasts for next year, according to a Reuters report.

However, Hatzius is optimistic about falling wage inflation about their salary expectations.

That some of these recent salary increases are more like one-off, one-time retention bonuses and things that won't necessarily be repeated," he said.

"But I think that's an important thing to look at. Economists expect inflation concerns to prompt the Fed to tighten monetary policy this year to counter rising prices.

In December, the majority of the monetary policy committee forecast three rate hikes this year, but Goldman forecast that the Fed will hike rates four times in 2022.

"Inflation is pretty political right now," Hatzius added. Consider the strong desire to reduce inflation on both sides of the political aisle.

Comments

60 billion pound financing package for English authorities

Michael Gove, the Secretary of State for Levelling Up, has today (19 December 2022) agreed a nearly £60 billion package for councils in England for the next fiscal year, ensuring that councils can continue to provide essential frontline services. The settlement means councils throughout England will receive an additional £5 billion, a 9% increase over last year's settlement, as the government continues to support councils and public services despite mounting financial pressures. The agreement for the following year contains a one-time Funding Guarantee that ensures every council in England will get at least a 3% increase in core spending power before any local decisions are made regarding council tax. Alongside this, the government confirmed today a new £100 million scheme for councils to safeguard the most vulnerable households from council tax hikes, fulfilling the campaign pledge to protect local taxpayers from excessive increases. Social care is also a priority, with the govern...

Unlocking the Secrets of the World of Finance

In today's fast-paced global economy, understanding the intricacies of finance is paramount for both individuals and businesses alike. Finance serves as the lifeblood of any economic system, fueling growth and prosperity. Our team at AIPRM Corp is dedicated to providing you with comprehensive insights into the world of finance. In this article, we delve deep into the financial landscape, unraveling its various components and complexities. Navigating the Financial Landscape Finance: A Holistic Perspective Finance encompasses a wide array of financial instruments and institutions, each playing a unique role in the broader financial system. At its core, finance involves the management of money, investments, and assets. Our comprehensive exploration of finance will leave you well-informed, whether you're a seasoned investor or a newcomer to the world of finance. Financial Markets and Instruments The world of finance thrives within a complex web of financial markets and instrument...

Strike, a Bitcoin Exchange, Raise $80M in Series B Funding

Bitcoin payment processor Strike has raised an additional $20 million in Series B funding, bringing the total to $80 million. A statement issued on Tuesday indicated that Ten31, a VC firm that focuses on Bitcoin companies, was the driving force behind the funding round. There were, however, additional financial contributions from Wyoming's University and Washington University in St. Louis. Stike will use the funds to strengthen its existing relationships with area businesses. The Lightning Network, which is used by Strike, is designed to speed up Bitcoin transactions, making it more practical for use in everyday transactions like buying goods online. Strike's CEO and founder Jack Mallers was quoted as saying in a statement, "any organization that is in the business of transferring money is interested in superior payments" and "we're in talks with many of them." "Any organization that is in the business of transferring money is interested in superi...

Search This Blog