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How will you know inflation's back?

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Inflation isn't necessarily a bad sign for everyone. That's because it can be produced by a booming economy that induces heavy hiring. The resulting labor shortages force wages up. When companies pass along wage inflation in the form of higher prices, consumers pay more.

In that regard, job creation is one trend to track when looking for leading inflation indicators, economists agree. It may be awhile, however. Most labor market analysts don't get concerned until the jobless rate dips below 5 percent or so. Given the current 9 percent unemployment rate, it's unlikely the country will face a worker shortage for the foreseeable future.


 

 

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