That said, my sense is that further increases in the policy rate may be necessary at some point, a stance I believe is consistent with my optimistic view of the economy's growth potential and momentum. In the language of central banking, my estimate of the neutral policy rate remains somewhat north of where we are now.
Chart 3: Sectoral wage and profit developments during and after the pandemic Source:Arce, Hahn and Koester (2023). Unit profits correspond to gross operating surplus over real value added. Contactintensive services include trade, transport, accommodation and food services as well as arts, entertainment, recreation and other services. Latest observations: 2022 Q4.