JPM's Kasman Sees Potential for 4% Nominal U.S. Wage Growth

The video discusses wage growth, focusing on the Employment Cost Index, which includes wages and benefits adjusted for inflation. It highlights the potential for wage growth if economic expansion continues and labor markets remain tight. The discussion also covers the shift in bargaining power towards workers, challenges posed by global risks, and the impact of demographic changes like baby boomers leaving the workforce. The importance of incentivizing discouraged workers to rejoin the workforce is emphasized, along with the role of the Fed in encouraging these trends.

What does the employment cost index include?

• Only benefits

• Wages and benefits

• Only wages

• Inflation rates

What is a potential outcome if the economic expansion continues?

• Reduction in labor market tightness

• Stagnation of wage growth

• Increase in nominal wage growth

• Decrease in wage inflation

What global factor could impact corporate profit margins?

• Increased productivity

• Global economic stability

• Productivity weaknesses

• Rising union power

What demographic change is affecting the labor market?

• Decrease in part-time jobs

• Rise in union membership

• Baby boomers leaving the workforce

• Increase in young workers

What is the Federal Reserve's stance on tight labor markets?

• They are indifferent

• They oppose it

• They discourage it

• They encourage it