Thursday, October 11, 2018

Waiting for higher wage inflation has been like watching paint dry. That is about to change with October data on average hourly earnings. A large base effect coming off could make wage inflation jump materially. But even beyond such base effects, wage inflation has been picking up, powered by a sustained and broad-based rise in services wage increases. We project further rises in wage inflation as the labor market tightens, even as the near-term dynamics in core PCE inflation remain subdued.

IIF Authors

Robin Brooks

Robin
Brooks
Managing Director and Chief Economist
@RobinBrooksIIF
rbrooks@iif.com

Jonathan Fortun

Jonathan
Fortun
Associate Economist
@econchart
jfortun@iif.com

Tariq Khan

Tariq
Khan
Research Analyst
+1 202 857 3339
tkhan@iif.com

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