The hard kind of inflation | opinion
Employment income is the largest and most reliable source of financing for consumer spending. Wages can rise 1-3 percentage points faster or slower than consumer prices for a variety of reasons — including but not limited to compositional and definitional differences — but larger gaps between the growth rates of wages and prices basically don’t exist outside of WWII and Korean war rationing, the late 1990s productivity boom, and the first year of the pandemic.
The exception, as you can see above, is the last data point: the striking uptick in this week’s November CPI report. But while a few labour-intensive services logged abnormally large price increases in November, so did services without an obvious wage link, such as mobile phone plans. Detmeister suspects a blip. The bottom line:
Is the slowing in goods and rents going to be enough to offset those still-strong inflation numbers in the [labour-intensive parts of] non-rent core services? The most recent two [CPI] reports were clear: it looks like the slowing in goods will be enough.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Elizabeth line workers vote to take strike actionInfrastructure employees working on the new line say their pay rise offer is well below inflation.
Read more »
What the inflation rate drop means for youWhat the inflation rate drop means for cost of living, interest rates and your bills
Read more »
Is UK inflation going to keep falling?Inflation is likely to have peaked, but it will remain very high for months to come.
Read more »
'Things are incredibly bleak': Small businesses struggling despite inflation drop🛍️ With inflation still in double digits, consumers have drastically reined in their spending and the impact on small businesses is nothing short of devastating
Read more »
Cost of living: Food banks receive Christmas funding boostDemand has increased in recent months due to rising inflation and the cost-of-living crisis.
Read more »