Fmr. Obama Chief Economist: ‘Wages Are Growing Slower than Prices; Real Wages Are Down’

EXCERPT:

GOOLSBEE: "Yes, there's a huge puzzle that's happening in the job market right now that it's -- that it's worth remarking on, which is, for everyone's saying that demand is high and we have an a massively overheated labor market, wages are growing slower than prices. The profit margins of companies are increasing. So you would not think real wages would be going down if the job market’s as tight as what some of the business leaders are saying. So, I -- I think that's a pretty significant puzzle. There's no evidence of the old wage-price spiral driving inflation. Wage-price spiral, almost by necessity implies wages are going up faster than prices. When real wages are going down there's not a danger of wage-price spiral."