December 7, 2022


On Friday’s broadcast of CNN International’s “First Move,” Rachel Solomon, CNN’s international business correspondent, said the imbalance between job opportunities and people looking for work “creates a vicious cycle, and makes the Fed’s job of fighting inflation more difficult.” and that wage gains are “outweighed by inflation.”

Solomon said,[A]Any other time you see a jobs report like this which is really kind of a spell about a really strong economy, and a very hot job market. But in an environment where inflation is 9.1%…well, it kind of adds an asterisk to this jobs report. … So, the complicating factor in all this is the demand for workers and wages. Now, Julia, there are 1.8 jobs open to everyone searching. When you have that kind of imbalance, it creates upward pressure on wages, right? I mean, just think about it. Firms have to motivate people to work for them, because there is such a demand for workers. Thus, they raise wages to try to motivate workers. And while that’s great for American workers, well, first of all, inflation has overtaken it. But that then shifts to higher prices, creates a vicious cycle, and makes the Fed’s job of fighting inflation more difficult.”

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