Inflation? Real American wages are going DOWN

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Fed September rate hike still in play: Economist

Every time it looks like the economic field of vision is clearing, something seems to happen to blur it up again.

As the Federal Reserve looks for a clear-cut sign to rise rates, Friday's inflation report brought a little something to both sides of the debate: Signs of upward pressure in the headline numbers, but no persistent wage pressures in the underlying mix.

The 0.3 percent rise in the consumer price index was in line with market expectations and got a big boost from housing, with owner's equivalent rent registering its biggest gain in nearly nine years and food prices soaring due largely to the avian flu outbreak in chickens.

That's all well and good for the Fed, which is looking for annualized inflation to hit somewhere in the 2.5 percent range before it starts moving off the zero-bound rates it has implemented since late 2008.

However, what Chair Janet Yellen and her fellow policymakers also would like to see is inflation being pushed by positive wage pressures as well.

On that account, the news isn't good.