On the economic data side, the calendar will be a bit light with the monthly report on producer prices and initial jobless claims highlighting the schedule.
All of this will come after a day in which the stock market rallied and the Dow hit a new record after investors shook off any concerns related to Washington, D.C. following news Tuesday about potential contact between the then-Trump campaign and Russian officials.
Additionally, investors appeared to cheer Fed Chair Janet Yellen’s prepared remarks before the House Financial Services committee, which Deutsche Bank economist Brett Ryan said were “largely in line” with the firm’s expectations.
Deutsche Bank still expects the Fed to begin paring its balance sheet at its September meeting and then resume increases in benchmark interest rates in December.
Ryan added, however, that, “market participants appeared to interpret a couple of points that Yellen made as potentially dovish with respect to the longer-term trajectory for monetary policy.”
Wage pressure everywhere
On Wednesday, the Federal Reserve released its often overlooked Beige Book report, a collection of economic anecdotes from each of the Fed’s 12 districts across the country.
This report, which has been the case in recent years, indicated that pressure for employers to find workers has been ratcheting up.
“Wage pressures generally trended with employment conditions, and rising wage pressures were noted among both low- and high-skilled positions,” the report said, referring to broad national conditions.
On a regional level, the takeaways were more specific.
In the Philadelphia region, the report said, “Pennsylvania staffing firms struggled to find qualified and committed workers.”
Adding that, “Staffing contacts reported spending more time and money on recruiting labor and refilling positions after the initial hire quit, sometimes after just a few days. Workers appear to have less loyalty to the job, and more job-hopping is showing up on résumés.”
Notably, however, this report showed that for all of the complaining many American business owners do about their inability to find good workers, there is a solution: pay people more.
The Philly Fed’s assessment of employment wages concluded with, “However, one large retailer reported having no difficulty getting quality job candidates in locations throughout the District after raising its base wage last year.”
How about that. Pay people more and then you get better jobs.
In the Atlanta Fed’s district, the Beige Book reported that, “Firms continued to deploy various tactics in an effort to find and develop pipelines of talent and retain workers; for example, developing partnerships with workforce development entities, schools, and military bases, expanding internal and external training and apprenticeship programs, strengthening recruiting efforts, and seeking out retirees to return to work.
“Some firms also enhanced compensation and benefits packages, particularly variable pay, healthcare contributions, flexible work arrangement offerings, and added vacation time.”
This, then, indicates that companies are bending over backwards to accommodate workers they want or need to hire.
But as Yahoo Finance’s Rick Newman reported last month, many workers simply don’t find that corporations pay enough to incentivize workers to move or to remain loyal to the company.
Or as one worker in Wisconsin told Newman, “I hear about these labor shortages, and I think, that’s a crock… When I compare salaries to what they were 10 years ago, they’re not significantly higher. It’s not enough for me to move across the country.”
And when we look at this past month’s jobs report, wages growing 2.6% over the prior year does not indicate that in the aggregate wages are ripping higher across the country.
The labor market, then, remains as ever a battle between the data and anecdotes. Just like almost everything else.
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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