Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
Why Wage Growth Is Fueling Sticky Inflation
With core PCE still rising and job openings climbing despite soft payrolls, Lucas and Luna dissect the disconnect between cooling GDP growth and persistent wage pressures. They explore how average hourly earnings are outpacing productivity in key sectors, creating a wage-price spiral risk that keeps the Federal Reserve cautious. Using July data showing unemployment at 4.1 percent alongside rising JOLTS vacancies, they ask whether this labor tightness is structural or cyclical, and what it means for interest rate policy heading into Q4.
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The skinny
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