Yellen suggests the US take protectionist action

The Covid-19 pandemic made clear the United States’ dependence on foreign supply chains, so the country would need to manufacture the most critical products domestically to protect its economic and national security, said Janet Yellen, Secretary of the United States Treasury. United.

“It is possible that the policies that people describe as protectionist are necessary to create the right incentives to produce things at home,” Yellen said in a recorded message for an online conference organized by the Financial Times.

The Treasury leader also said, “We certainly want to work with other countries, with our allies and partners, to address supply chain resilience collectively, so I don’t think this is just about America producing everything. at home, but in some cases that may be part of the answer, “as reported by the Bloomberg agency.

According to US officials, shortages related to the pandemic due to bottlenecks in supply chains were the main driver of inflation, which is well above the Federal Reserve’s 2% target.

In October, the annual inflation rate was 6.2%, according to data released by the Bureau of Labor Statistics.

Wages are not a problem

After the lifting of restrictions due to the pandemic and the economic reactivation, many companies in the United States, especially in the service and hospitality sectors, faced a shortage of workers, for which they had to raise wages to attract labor.

Officials have said on several occasions that this is beneficial for people, but that it is a phenomenon that must be observed to avoid generating greater inflationary pressures.

Despite that, Yellen believes that there is no evidence of a price spiral caused by rising wages.

“I don’t see any evidence that this is happening,” he said at the event organized by the Financial Times entitled “The Global Boardroom.” But he added that it would be appropriate for the Fed to take steps to make sure that doesn’t happen.

Unit labor costs in the United States rose more than initially thought in the third quarter of 2021, suggesting that inflation could continue its upward trend.

The US Department of Labor reported yesterday that unit labor costs, which refer to the price of labor per unit of production, accelerated at an annual rate of 9.6% in the third quarter of the year.

That figure surpassed the record of the previous quarter (from April to June), when labor costs grew 5.9 percent.

For its part, hourly compensation increased 3.9% per year in the third quarter, below the 8.4% per year registered in the second quarter.

Earlier this month, in a two-day appearance before lawmakers, Jerome Powell, chairman of the US Federal Reserve, said that wage increases are not occurring at a rate that could lead to higher inflation, but noted which was a data under observation.

“We have seen a significant increase in wages. We do not see them rising at a worrying rate that tends to cause higher inflation, but that is something that we are watching very closely, “said the Fed chairman.

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