“Fake” Puzzles

They are Phillips-Curve related: An extended run of modest labor market gains this year has produced little acceleration in wage growth or inflation, underscoring a puzzle that complicates Federal Reserve policy decisions looming in the months ahead. One place some are trying to find a solution is in “demography”. An example from the San Francisco Fed: Simply stated, new entrants to full-time work, whether they are entering for the first time, re-entering from periods of involuntary or voluntary non-employment, or moving from part-time to full-time work, are more likely to make below-average wages. Counterintuitively, this means that strong job growth can pull…

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