US wage inflation The wages of tomorrow

What is happening to US inflation? According to the most direct measure, the consumer price index, it is under good control. In June, the CPI was 2.5% higher than the year before, a healthy decline from the 3.5% annual rate reported in April. But the trend of wage growth points towards a more inflationary future. A year ago, the average US worker’s hourly compensation was growing at a 4% nominal rate, slightly ahead of 3.5% GDP growth. But by the first quarter of 2005, hourly wages were rising ...