May 17, 2018 / 3:41 PM / 9 months ago

Fed's Kashkari says low wage growth is 'big conundrum'

FILE PHOTO: Minneapolis Fed President Neel Kashkari speaks during an interview at Reuters in New York, United States on February 17, 2016. REUTERS/Brendan McDermid/File Photo

(Reuters) - Minneapolis Federal Reserve Bank President Neel Kashkari on Thursday repeated his view that low U.S. wage growth despite very low unemployment is a “big conundrum.”

One theory that may explain the unexpectedly slow growth in wages, he said, may be that there is more slack in the labor market than 3.9 percent unemployment suggests. Another potential explanation is that businesses have gained bargaining power at the expense of workers, giving them the upper hand in wage negotiations. Kashkari was speaking at an event in St. Paul, broadcast on the regional Fed bank’s website.

Reporting by Ann Saphir; Editing by Chizu Nomiyama

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