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What Goes Up
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Business New Haven
11/15/1999
By: Michele Beck
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WASHINGTON, D.C. - Americans had better hold on to their wallets. The U.S. Chamber of Commerce says recent sharp increases in consumer prices was not unexpected, given recent hikes in producer prices, the reversal in oil-price declines and rising wage bill. This increase could provide more ammunition for inflation hawks at the Federal Reserve to raise interest rates at their next meeting this month, according to the chamber.
"With a stock market correction underway, a softening housing sector and some moderation in retail sales, the economy must be slowing on its own," said Martin A. Regalia, the chamber's chief economist. "Raising interest rates at this time could be considered 'piling on.'"
With prices soaring high in stores and gas stations, will the minimum wage be raised? "Now is not the time to be raising the minimum wage," said Regalia. "Such an increase will only exacerbate recent wage increases and lead to even greater inflation. Instead, Congress should be focusing on the tight labor markets and figuring out how to change immigration laws to bolster the domestic workforce with productive workers from abroad."
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