The Pandemic-Related Public-Private Sector Pay Gap is Finally Narrowing
According to today’s Employment Cost Index report, wage disinflation slowed, and so did real wage growth. Private sector wages and salaries rose 4.5% over the year, down only 0.1 percentage points from last quarter, and over-the-year real wage growth fell from 1.7% to 0.8% in Q3. Wage growth for public sector workers surged, however, after lagging behind since early in the pandemic.
Core Inflation Hits 15-Month Low, Even as Unemployment Falls
The Fed warned that unemployment would have to rise for inflation to come down, but the CPI declined outright in December even as unemployment fell to a 50-year low.