, Columnist
The Fed's Long-Awaited Wage Inflation Is at Hand
Producer prices are accelerating at the fastest pace since 2012. That has begun to seep through to wages.
After the storm.
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Listen to any central banker and they’ll share their worst fear in two words, “wage inflation.” By all accounts, wages should be rising closer to the 3 percent rate that prevailed during the previous recovery. Surveys express the difficulty employers have recruiting skilled workers, an environment that intuitively suggests paying up on paydays.
As a result, every data release that shows wage pressures are subdued leaves central bankers scratching their heads. Chances are policy makers are missing a much more traditional form of inflation they’ve long since written off as extinct. Why the singular focus on wages?