Globalization has flattened the Phillips curve relationship between inflation and unemployment in the United States. Specifically, the outsourcing of manufacturing jobs to China decoupled goods inflation from domestic labor conditions and increased the supply of workers seeking employment in low-wage service sectors, flattening the slope of the services Phillips curve. While the Phillips curve still holds for services inflation, the relationship is weaker than in the past. This implies that the Federal Reserve should not tighten monetary policy prematurely based solely on estimates of full employment and wage growth.