Why aren’t more people being sacked?
- How inflation has so far fallen without mass casualties
If central bankers are to defeat inflation, they must cool the labour market. For two years rich-world wage growth has added to corporate costs, sending prices relentlessly upwards. But as they began raising interest rates to slow the economy, policymakers hoped for an even rosier outcome. They wanted to achieve a “soft landing", which involves both bringing down inflation, and doing so without mass job losses. It is a lot to ask of a tool as blunt as monetary policy.