Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: farlander
Anything closer to 4% and we’ll be seeing serious inflation.

Really? When has low unemployment ever caused inflation?

46 posted on 04/06/2007 7:25:51 PM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
[ Post Reply | Private Reply | To 44 | View Replies ]


To: Moonman62

Yes, really. Too low of an unemployment rate (yes, there is such a thing) causes inflation. Meaning, employers can’t find people to fill the jobs, and, must compete for the (un)available labor by paying more and more. This reached a crescendo in 2000 when some high-tech companies were giving huge signup bonuses and BMWs for people to switch companies. We all know how that ended.

Ultimately higher labor costs are passed to the consumer, and, voila, there’s your inflation. Therefore, Fed will not be lowering rates any time soon - if anything, they’ll be wanting to raise rates as labor markets overheat.


52 posted on 04/08/2007 1:24:43 AM PDT by farlander (Try not to wear milk bone underwear - it's a dog eat dog financial world)
[ Post Reply | Private Reply | To 46 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson