That’s finally starting to change now that inflation is waning. In June, for the first time in 26 months, US workers’ real weekly earnings grew on an annual basis, according to data released this week from the Bureau of Labor Statistics. Annual real weekly wages were up 0.6% last month, a rate that’s a tick below the 0.7% gain seen in February 2020. June also marked the second consecutive month of year-over-year real hourly wage growth — the first back-to-back months of gains since early 2021.
“The Fed does not want to repeat the mistake of the 1970s, when they stopped the tightening and inflation bounced back up,” said Sung Won Sohn, professor of finance and economics at Loyola Marymount University and chief economist at SS Economics. Fears of a dreaded “wage-price spiral” — when rising wages and prices feed into each other — have made a bogeyman out of wage growth.
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