The Fed is tracking incoming labor figures as it decides how high interest rates need to go and how long they should stay elevated.
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By Jeanna Smialek
Federal Reserve officials have said that they are looking for the labor market to cool as they assess how much more they need to do to slow the economy, and the job report on Friday suggested that policymakers may still have a ways to go.
Employers hired ravenously in January, the jobless rate dipped to a level not seen since 1969, and the average workweek ticked up — all signs that demand for labor is booming.
At the same time, though, wage growth continued to moderate. Average hourly earnings climbed by 4.4 percent over the year, more than forecast in a Bloomberg survey of economists but less than 4.8 percent in December. Pay growth has been decelerating for months, though it remains faster than is typical and is still notably quicker than the pace that Fed officials have at times suggested would be consistent with their 2 percent inflation goal.
Wage growth is slowing along with inflation
Year-over-year percentage change in earnings vs. inflation
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