Friday , November 16 2018
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Someone is wrong on the internet, wages and the stock market edition

Summary:
You may have heard that share prices are generally a bit lower now than they were a week or so ago.One argument is that the drop was precipitated by the release of American job market data on Friday. Average hourly pay was reported to have grown by 2.9 per cent over the previous year — the fastest pace since June 2009. The thinking is that this will necessarily lead to faster consumer price inflation, or at least to Federal Reserve tightening in response to the fear of faster inflation.Torsten Slok, Deutsche Bank’s chief international economist, gave a good summary in a recent note to clients:The market has been worrying more and more about an overheating of the economy. That is why rates have moved higher. And these fears culminated on Friday with wage inflation hitting a post-crisis

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You may have heard that share prices are generally a bit lower now than they were a week or so...

Matthew C Klein
I write about the economy and financial markets for Bloomberg View. Before that I wrote for The Economist. I have worked at the world’s largest hedge fund and read every FOMC transcript since May, 1987

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