New York Times David Leonhardt argues that real wages are rising, so those resilient workers that remain employed will benefit from the bounce-back in "effective pay". The problem with this insight is twofold: first, the expansion phase of real hourly compensation, a broader measure of total earnings, is falling; and second, sitting atop a mountain of consumer and mortgage debt, the aggregate economy cannot afford a compensationless recovery.

As we wait for the FOMC statement, I see that the inflation-deflation debate is continuing. On the deflation side of the debate, the economy remains anemic and Nobel Laureate Joseph Stiglitz is calling for more stimulus. Moreover, Pimco head El Erian warned of deflationary risks in the US economy.

David Currie, partner and chief executive at SL Capital Partners, reports in the FT, Most pensions need help with private equity investment:

We have maintained all along that the statistical economic recovery would lose momentum after the effects of the stimulus and inventory replenishment wore off, and the recent data are confirming our view. Moreover there are no drivers to sustain the recovery or prevent deflation without additional drastic measures with an uncertain outcome. The likelihood therefore is either extremely slow growth or the feared double-dip.