Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!
Expand chart
Data: FacetSet; Chart: Axios Visuals

The Fed has two jobs: Keeping inflation at 2%, and ensuring full employment. But what does full employment mean? According to Minneapolis Fed president Neel Kashkari, we're clearly not there yet — despite the fact that the unemployment rate is at a 50-year low of 3.5%.

Why it matters: If we're not at full employment, and inflation remains below the 2% target rate (as it does), then the Fed has little choice but to step on the gas.

Until we see wage growth net of productivity climbing at above 2%, then we're not really at maximum employment.
— Minneapolis Federal Reserve Bank president Neel Kashkari, in an interview with Axios

By the numbers: Hourly wages were $27.91 in June, up 3.2% from a year previously. (They've since decelerated a bit, with September's data showing earnings growth of 2.9%.) Productivity, meanwhile, was growing at a 1.8% pace in June. Which means that wage growth after accounting for productivity is well below the Fed's 2% inflation target.

  • The U.S. won't be at full employment, says Kashkari, until that number rises to above 2%.

What they're saying: Kashkari tells Axios that the headline unemployment rate is "almost useless" in determining whether the U.S. economy is at full employment.

  • The unemployment rate only counts people who are actively seeking work, but most of the new jobs being created are going to people who weren't actively seeking work during the previous month — people who didn't count as unemployed.
  • So the unemployment rate doesn't give a good indication of how many more people the economy can gainfully employ.
  • Instead, Kashkari likes to look at wage growth. "We're trying to assess supply and demand in the market," he says. "The best way of assessing supply and demand in the market is to look at the price. The price of labor is wage growth. And until we see wage growth net of productivity climbing at above 2%, we're not really at maximum employment yet."

The big picture: Kashkari is a noted dove, and it's not clear that other Fed officials would agree entirely with his analysis. But it's undeniable that wage growth is low.

  • If Americans started earning more money, the Fed would likely welcome that as a sign of economic health, rather than worrying that it might start causing too much inflation.

Go deeper

Myanmar military fires UN ambassador after anti-coup speech

Photo: Peerapon Boonyakiat/SOPA Images/LightRocket via Getty Images

Myanmar's military regime on Saturday fired the country's Ambassador to the United Nations, Kyaw Moe Tun, a day after he gave a pro-democracy speech asking UN member nations to publicly condemn the Feb. 1 coup, The New York Times reports.

Details: State television said the ambassador had "betrayed the country and spoken for an unofficial organization which doesn’t represent the country and had abused the power and responsibilities of an ambassador."

Scoop: Biden admin call on Putin pipeline provokes GOP anger

Putin chairs a video meeting in July 2020. Photo: Alexei Druzhinin/Sputnik/AFP via Getty Images

A briefing between the State Department and congressional staff over Vladimir Putin's Russia-Germany gas pipeline got tense this week, with Biden officials deflecting questions about why they hadn't moved faster and more aggressively with sanctions to stop its completion.

  • The Biden officials also denied negotiating with the Germans over a potential side deal to allow the pipeline to be finished.
Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: Biden: It's "not the time to relax" COVID mitigation efforts — Tracking coronavirus variants through sewage.
  2. Vaccine: FDA advisory panel endorses J&J COVID vaccine for emergency use — About 20% of U.S. adults have received first vaccine dose, White House says — New data reignites the debate over coronavirus vaccine strategy.
  3. Economy: What's really going on with the labor market.
  4. Local: All adult Minnesotans will likely be eligible for COVID-19 vaccine by summer — Another wealthy Florida community receives special access to COVID-19 vaccine.
  5. Sports: Poll weighs impact of athlete vaccination.
  6. World: Brazil's capital enters 24-hour lockdown as coronavirus cases surge.