Imbalance between jobs, job seekers ‘Creates a vicious cycle’ that makes fighting inflation ‘much harder’

On CNN International’s “First Move” Friday, CNN International Business Correspondent Rahel Solomon said the imbalance between job openings and job seekers “creates a vicious cycle and makes it the Fed’s job to try to combat inflation much more difficult.” And that wage gains are “outpacing inflation.”

Solomon stated:[A]Every other time you see a jobs report like this and it really means a really strong economy, a really hot job market. But in an environment where inflation is at 9.1%…well, it kind of adds an asterisk to that jobs report. … So the complicating factor in all of this is the demand for workers and wages. Right now, Julia, there are 1.8 open jobs for every person searching. When you have that kind of imbalance, it creates upward pressure on wages, right? I mean, think about it. Companies must incentivize people to work for them because there is such a demand for workers. And so, they raise wages to try to motivate workers. And while that’s great for American workers, first of all, it beats inflation. But that then leads to higher prices and creates a vicious cycle and makes the Fed’s job of trying to fight inflation that much harder.”