Wage growth just hit 3.15% — lowest in five years.
This matters more than the headline jobs number. Without sustained wage pressure, the inflation story loses its engine. You can't have persistent high inflation when labor costs are cooling like this.
The Fed's been fighting yesterday's war. Wage growth was the real inflation transmission mechanism they feared, and it's now running below historical averages. Corporate pricing power fades when workers can't afford higher prices.
Markets are still pricing in rate cut uncertainty, but the wage data is screaming that the inflation risk is behind us. The question now isn't whether rates come down — it's whether they waited too long and broke something in the process.
Wages don't lie. They're the most honest signal we have.
This matters more than the headline jobs number. Without sustained wage pressure, the inflation story loses its engine. You can't have persistent high inflation when labor costs are cooling like this.
The Fed's been fighting yesterday's war. Wage growth was the real inflation transmission mechanism they feared, and it's now running below historical averages. Corporate pricing power fades when workers can't afford higher prices.
Markets are still pricing in rate cut uncertainty, but the wage data is screaming that the inflation risk is behind us. The question now isn't whether rates come down — it's whether they waited too long and broke something in the process.
Wages don't lie. They're the most honest signal we have.