Shopdog used Bureau of Labor Statistics data to analyze how effective interest rate hikes were at tempering record inflation.
to see how effective interest rate hikes were at tempering record inflation. Inflation and wage increase rates are calculated over the 12 months before the reference month.Wages rose to keep up with inflation, which is now nearing more typical levels
Not all prices change as quickly as others during a recession or inflation. One such price group is wages, or the cost of labor. Theoretically, wages should rise and fall due to market forces. However, several factors contribute to salaries growing slower than inflation—a phenomenon known as"." For one, salaries are often set through agreements with trade unions or employment contracts, which tend to limit wages' susceptibility to drastic changes.
Should there be deflationary pressure on wages, the stickiness benefits employees because while the value of money increases, having the same nominal wage as before means the purchasing power of their salaries increases. The converse can hurt employees during inflationary pressures on prices because until salaries are renegotiated or voluntarily raised, the value of the wages disbursed decreases as money loses its value.
The disparity between annual wage growth and annual inflation continued to expand until the Federal Reserve began its inflation rate hikes in early 2022, after which the
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