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Wednesday, February 3, 2010

Don't Worry About Inflation... For Now

Commodity driven inflation absolutely can pose major problems, but it is usually wage inflation that feeds into any out-of-control inflation spiral. Thus, keep the following in mind when thinking about whether inflation will be a major issue over the near term horizon.

Marketwatch reports:

The costs of employing a worker in the United States moderated in 2009 to the slowest pace on record, the Labor Department reported Friday.

For the past calendar year, the employment-cost index increased 1.5%, the slowest rate of increase since the government began tracking the data in 1982. This is down from a 2.6% increase in 2008.

Wages increased 1.5% in the past year. Benefit costs rose 1.5%. These are both record lows.

Source: BLS