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Wages climbed 5%, a still-rapid pace as Fed awaits slowdown
- Bostonian 4y agoWith inflation above 8%, that means real wages have fallen at a 3% rate.
- nabla9 4y agoFed's concern is only the part of inflation that 1) it can change, and 2) is self sustaining. Only that part of inflation that goes trough wages is self sustaining for a long term. If wages don't increase, demand decreases when people can't afford to pay.
- refurb 4y ago8% is the monthly inflation (0.7%) annualized. We haven’t even had a full year of really high inflation. I believe if you calculate it, inflation has been ~6%/yr over the last 2 years. So a 5% rise in wages is almost keeping up with inflation this year. Someone can check my math using the CPI-U numbers.
- junofan 4y agoAbove 8% is YoY. Last release was May 22 at 1% MoM adjusted, which is 12.6% annualized.
- refurb 4y agoCPI-U June 2020: 257.2 CPI-U May 2021: 268.6 CPI-U May 2022: 291.4 2020 to 2021 was 4.4%, 2021 to 2022 was 8.4%. https://fred.stlouisfed.org/series/CPIAUCSL https://fred.stlouisfed.org/series/CPIAUCSL
- reducesuffering 4y agoLike, the other commenter said, it's YoY, and a subtle mistake to think you can compartmentalize it to monthly is YoY / 12. Often what can happen is a sudden spike, like 8% inflation, where every month for the next year would turn out as 8% even though the month-to-month is flat every month except for the one sudden 8% jump. Monthly = YoY / 12 iff inflation is linear and steady. (it almost never is)
- dburflzz 4y agoWage growth by itself means nothing if not compared with something else like inflation.