THE United States could be on the verge of a worrisome surge in wages if unemployment continues its downward trend, based on research Dallas Federal Reserve Bank president Richard Fisher presented to his colleagues at the Fed’s policy-setting meeting last week.

    An unpublished paper prepared by his staff showed “declines in the unemployment rate below 6.1 percent exert significantly higher wage pressures than if the rate is above 6.1 percent,” Fisher told Reuters in an interview Friday.

    Fisher said he had his staff analyze state-by-state unemployment and wage data from 1982 to 2013 to try to figure out why wage inflation is emerging in Texas but not elsewhere in the nation.

    The results, he said he told his colleagues, are “noteworthy and need to be thought through.”

    The U.S. unemployment rate in August was 6.1 percent, exactly the point below which his staff’s research showed wages could start to take off.

    “The number just happened to be 6.1 percent — that is what shook out of the data,” Fisher said.

    The Federal Reserve, which has kept short-term interest rates near zero since December 2008, is expected to begin to tighten policies next year. The precise timing will depend heavily on its assessment of the labor market.

    “There are still too many people who want jobs but cannot find them, too many who are working part time but would prefer full-time work, and too many who are not searching for a job but would be if the labor market were stronger,” Fed Chair Janet Yellen said.

    (SD-Agencies)