Wages are ‘not keeping pace with higher prices,’ economist says

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Jobs report: Wages are ‘not keeping pace with higher prices,’ economist says

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Jobs report: Wages are ‘not keeping pace with higher prices,’ economist says

Sat, March 5, 2022, 7:56 AM

NatWest Co-Head of Global Economics Michelle Girard joins Yahoo Finance Live to discuss the February jobs report and economic data.

Video Transcript

- --imports. But joining us now to further dive in on today's market activity, as we close out another volatile week, we've got Michelle Girard, who is the NatWest's Co-Head of Global Economics, and Michelle, the big economic data point of the day, the Jobs Report, as we've been discussing. I also want to play a quick clip for you as we begin this conversation from President Biden's remarks, and then get your reaction on the other side.

JOE BIDEN: I understand, our top priority must be getting prices under control. Look, our economy roared back faster than most predicted, but the pandemic meant that businesses had a hard time hiring enough workers to keep up in production in their factories. The pandemic also disrupted the global supply chains. When factories closed, it takes longer to make goods, and to get them to the warehouse, and get them to the store, and prices go up.

- So the president clearly acknowledging the reading from today's Jobs Report, and particularly, where do you believe some of the momentum on the employment situation front can maintain itself as the president did give a nod to the labor shortage, but also, the ability for the economy, to start to recover and continue to move in the right direction?

MICHELLE GIRARD: Well, I think what we heard from the president was the explanation about why prices were moving higher, this imbalance between supply and demand, and higher inflation is a negative for the growth prospects. It acts like a tax on the consumer. Consumers are having to pay more for energy and food. They have less to spend elsewhere.

So when you talk about the momentum in terms of employment, we've had very good momentum. Clearly, today's numbers were a strong beat to the upside. We saw nice gains. Not only in the leisure and hospitality sector, which, of course, was hard hit by the pandemic, but also, construction and manufacturing. So it was very broad based.