The durability of the recent surge in wage growth is potentially cause for concern since it may become incompatible with price stability despite the very clear advantages of wage growth. In industries with high labor costs, wage rise is frequently believed to lead to price increases.
Despite the fact that both trends reached their peaks around the beginning of 2022, the persistent component of core services inflation began to rise before trend wage growth did. However, it also shows that it has decreased more quickly.
Constant services Although it appears to have leveled out afterward, inflation significantly decreased between June and October.
The pace of this reduction is still very unknown, but a further slowdown in average pay growth may reduce inflationary pressures.
More By This Author:
Wave-Trend Update
Central Banks Face A Conundrum
Utilizing The Dynamic Wave-Trend Approach With The Vanguard Growth ETF… A Surprising Advantage
Comments
Log in or sign up to join the conversation.