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Fed has to walk fine line on inflation as wages rise

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U.S. businesses ramped up hiring in October, and wages rose by the largest year-over-year amount in nearly a decade. In the final major economic report before Tuesday’s congressional elections, the government said U.S. employers added 250,000 jobs in October. The unemployment rate stayed at a five-decade low of 3.7 percent. Classic economic theory predicts at some point, a tight labor market pushes employers to hike pay more aggressively to keep and attract the workers they need. But higher wages can lead to higher prices. And the Federal Reserve could have something to say about that. 

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