Home Prices Up, Pay Down: "No Concern" For Fed
St. Louis Federal Reserve Bank President William Poole had a comment on Reuters today. "The regional Fed bank president said that while housing prices were rising quite rapidly in some areas, most of the movement was in a 'narrow segment' of the market' suggesting he saw little risk of a national bubble."
"Poole said home price gains appeared to be mostly explained by the low level of interest rates and rising incomes."
Is anybody at the press conference listening? He had just said this, "Anecdotal reports suggested workers were still 'in pretty plentiful supply. It looks like there's a fair amount of room for expansion of employment without creating a lot of upward pressure on wages.'"
The Financial Times had this out today. "Real wages in the US are falling at their fastest rate in 14 years. In the final three months of 2004, real wages fell by 0.9 per cent. The last time salaries fell this steeply was at the start of 1991, when real wages declined by 1.1 per cent."