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"Companies will have to start to increase their work force and start hiring more aggressively should the upward trend in the economy continue," Annalisa Piazza, an analyst at Newedge Strategy, wrote in a note to clients. The economy has added 192,000 jobs a month so far this year, on average, a modest improvement on last year's average 183,000 new jobs a month. For now, the modest rise in labor costs means wages aren't growing fast enough to raise worries about inflation. The Federal Reserve monitors productivity and labor costs for any signs that inflation could pick up. Mild inflation has allowed the Fed to keep short-term interest rates at record lows and to buy bonds to try to keep long-term rates down.
[Associated
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