Wage Growth As A Leading Inflation Indicator
Wage growth peaked four years ago. Since 1985, it has led CPI by three to seventeen months in every single cycle. The May 4.2% inflation print is the noise. Watch the wages. Headline CPI just printed 4.2% year-over-year for May. The highest reading since April 2023. The 10-year Treasury punched above 4.6% on the back of it, then pulled back recently. Energy ran +23.5% over the past twelve months on the Iran war, accounting for roughly 60% of the monthly all-items gain, and the doom crowd keeps pushing this is 1979 all over again with rate hikes ahead, a recession behind, and a cornered Fed…
The skinny
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