Morning Must-Read: Justin Wolfers @JustinWolfers on Twitter: What This Morning's U.S. Wage Numbers Mean

Justin Wolfers @JustinWolfers on Twitter: What This Morning's U.S. Wage Numbers Mean: "Employment cost index only up 0.6% in the past quarter...

...putting it up 2.2 percent over the year. Consistent with inflation well below 2%. If you think the US labor market is anywhere near capacity, you expect wages to be growing at 3.5-4%. They're growing at 2.2%. There's nothing in these wage data to give the Fed any confidence that inflation is going to drift back up towards its target anytime soon. The good news in these wage data is that this is the economy telling us that it can generate plenty more jobs without hitting bottlenecks. A thought on the Phillips Curve: Perhaps wage data are telling us that both the long-term unemployed & those out of the labor force matter.