The unexpectedly strong U.S. jobs report that temporarily depressed stocks Friday wasn't as hot as many interpreted, according to Wharton School economist Jeremy Siegel, who said gains in wages really represent workers trying to catch up to high inflation.
Siegel, appearing on CNBC's "Closing Bell: Overtime" after the market close Friday, stood by his view that inflation is over, explaining that major price indexes are coming down and warrant a slowdown in Federal Reserve interest rate hikes.
He chided the Fed for trying to stymie wages in the central bank's effort to wrangle inflation back down to its 2% target.
"I did not regard today's jobs report as hot hot hot," Siegel said Friday, noting that hours worked declined and household survey data — versus establishment data — showed lower employment.
Stocks initially sank Friday after government data showed stronger-than-expected gains in payrolls and hourly earnings. Shares recovered later in the day, with the Dow Jones Industrial Average closing slightly higher and the S&P 500 and Nasdaq Composite indexes ending only slightly lower, and all three measures ending the week higher.
The jobs report was neither weak nor strong, according to Siegel.
"We had 5% year-over-year wage growth, we have 8% inflation. Workers are trying to catch up and they're not, they're still falling well behind," the economist said.
"It just disturbs me to think that the Fed's policy is to crush wages so (inflation goes) back down to 2%," Siegel added. They "are basically saying to the workers, 'You're not going to catch up to inflation and we're going to prevent you from catching up to the inflation.' That's an insane policy."
