And, since wage movements have historically been sensitive to tightness in the labor market, the recent behavior of both nominal and real wages point to weaker labor market conditions than would be indicated by the current unemployment rate. There are three reasons, however, why we should be cautious in drawing such a conclusion.
The latter may be impaired by a combination of unwarranted stigma due to the fall-out form the US subprime crisis, by stringent regulatory requirements and by a range of structural and practical factors. These have to be addressed primarily outside the realm of monetary policy, even if the latter could potentially perform a catalytical role in some circumstances.