(1) WAGES. On a y/y basis, today’s employment report showed that average hourly earnings for all workers rose 5.5% through April. However, the 3-month wage inflation rate has been falling below this rate for the past three months and was down to 3.7% during April. The same can be said for the 3-month wage inflation rate in goods-producing industries (4.1% vs 5.2% y/y) and service-providing industries (3.6, 5.6). (See the three charts below.)
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Inflation
Inflation Showing First Signs of Peaking
We are on the lookout for signs that inflation might be peaking. It’s hard to find any when we look at the price and wage data on a y/y basis. However, there are hopeful signs in numerous 3-month percent changes at annual rates. Consider the following:
