AS WAGE PRESSURES POP UP, KEEP YOUR EYES ON THE MIDWEST
While U.S. wage inflation still appears tame, several regional banks of the Federal Reserve report worker shortages for skilled construction, manufacturing, and clerical jobs in their districts. And shortages of temporary workers are cropping up in such cities as Chicago, Dayton, Denver, and Austin, Tex.--forcing some temporary-help agencies to start bidding up wages.
If that trend accelerates, it will take hold first in the Midwest, predicts Mark M. Zandi of Regional Financial Associates Inc. That's because the Midwest, unlike other regions with upswings in industrial activity, continues to suffer from out-migration. Indeed, Zandi notes that jobless rates are now below 6% in Chicago and Detroit, 5% in Indianapolis and Milwaukee, and 4% in Des Moines, Minneapolis, and Omaha.GENE KORETZ