Wages in the United States are rising as the economy continues to rebound from the hit from the pandemic, but the increases are not occurring at a rate that could lead to higher inflation, said the chairman of the Federal Reserve, Jerome Powell.
“We have seen a significant increase in wages,” Powell said during a hearing before the House Financial Services Commission.
“We don’t see them rising at a worrying rate that tends to lead to higher inflation, but that is something that we are watching very closely.”
Powell also said that the US economic recovery is stronger than that of other major economies, thanks in part to more robust fiscal support.
But with millions of Americans still out of work, central bank officials must balance their mandate to achieve maximum employment with their goal of price stability, according to Powell.
“We have to balance those two goals when they are in tension, as they are now,” Powell said. “But I guarantee you that we will use our tools to make sure that this high inflation that we are experiencing does not take hold.”