WASHINGTON - Two Economic Policy Institute analyses of government data released today show that further Federal Reserve rate hikes will do nothing to better the economy in the face of energy-driven inflation pressures and a labor market showing a record decline in real average wages.

EPI's GDP Picture, by economist Josh Bivens, analyzes today's report from the Bureau of Economic Analysis, which finds GDP increased at an annual rate of 3.8 percent in the third quarter of 2005. But Bivens looks behind the numbers and finds, among other things, that the personal savings rate in this same quarter was -1.1 percent - the first negative savings rate on record since quarterly data was first collected in 1947. He also explains how virtually all current inflation pressures stem from energy prices, and that further Fed interest-rate tightening can't stem this type of inflation without inflicting damage on the wider economy.

And in EPI's Wages Picture, which analyzes today's report from the Bureau of Labor Statistics, senior economist Jared Bernstein looks into the 2.3 percent growth of employers' wage costs over the past year - the slowest growth on record. He discuss the implications for working families - the only way they can raise their incomes is by working more hours - and why there is no evidence of an overheating labor market that needs to be cooled by Fed rate hikes.

To read the GDP Picture, click here.

To read the Wages Picture, click here.

For more on EPI senior economist Jared Bernstein, click here.

For more on EPI economist Josh Bivens, click here.

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