Initial Jobless Claims Lowest Since 1969 As Wage Growth Hits 3.5% YoY (Phillips Curve Resurfaces!!)

The initial jobless claims for March beat expectations and is at the lowest level since 1969.  Coupled with wage growth hitting 3.5% YoY (the highest since 2010), it appears that the Phillips Curve has resurfaced.

The Phillips Curve is the relationship between the unemployment rate and wage growth.

phillips-curve-hypothesis-4-638.jpg

The Phillips Curve has been MIA (missing in action) for a long time, but has resurfaced in the form of initial jobless claims and wage growth. While Core Inflation YoY is a tepid 1.79%, wage growth is climbing to almost 3.5% YoY.

joblea

If you believe the Taylor Rule (Mankiw specification), The Fed should continue to raise its target rate.

mankinest

Wage growth at around 2x core inflation? Over, under, sideways, down.

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