Economics
Inflation Gets a Boost From Higher Wages and Import Prices, New York Fed Study Says
- Pass-through effects have increased during the pandemic
- Imported input prices having larger effect on US inflation
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US consumer inflation, which is running near the fastest pace in 40 years, has been increasingly affected by higher wages and import prices, according to a new study from the Federal Reserve Bank of New York.
“We find that the pass-through of wages and input prices to the US producer price index has grown during the pandemic,” authors Mary Amiti, Sebastian Heise, Fatih Karahan, and Aysegul Sahin said in a posting on the bank’s website Tuesday. “Both the large changes in these costs and a higher pass-through into domestic prices have contributed toward higher inflation.”