Fortune: Sluggish wage growth could weigh on a Fed rate hike

This “in-your-face” evidence that vigorous hiring isn’t lifting our paychecks also reflects a sharp dropoff in bonus and incentive pay (particularly in the private sector). And it reiterates that after years of easing, the Fed’s $4.5 trillion effort to stimulate “good” inflation—particularly in terms of wage increases—hasn’t amounted to much. “There’s only so much that monetary policy can do to influence the robustness of the labor market,” says Victor Calanog, chief economist and senior vice president at Reis.

Regardless, weak wage growth suggests that the labor market isn’t healthy enough to withstand higher borrowing costs, and thus the Fed could refrain from raising interest rates in September, says Irene Tung, senior policy researcher at the National Employment Law Project. “It’s a wake-up call that the Fed needs to stay the course on monetary policy.”

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