Last week’s unemployment figures released by the US Bureau of Labor Statistics were further signs that the labor market as well as the overall economy continue to improve. Headline unemployment is at the lowest level since the technology boom fueled 1999-2000 period. Unemployment including part time workers is approaching levels experienced during that same timeframe. While this is good news for the American worker, the market is concerned that labor scarcity could place upward pressure on wages, inflation and ultimately interest rates. Right now, nominal wage inflation is contained at 2.6%, a level the Federal Reserve has indicated to be tolerable.
