LogFAQs > #961920792

also, another detail that demands analysis: is the wage growth driving the CPI rise, or is the CPI rise driving the wage growth?

https://www.bls.gov/news.release/eci.nr0.htm
https://www.bls.gov/news.release/cpi.nr0.htm

https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm
(from drop-down, select 20 year history which is second option)
https://www.bls.gov/charts/employment-cost-index/compensation-in-private-industry-and-state-and-local-government-3-month-percent-change.htm#

to my eye, the CPI is leading the employment cost, not the other way around. this makes more sense: supply chain interruption causes products to get more expensive for all producers, which causes employees to view their salary as less worthwhile and demand more, and employers exhibit a delayed reaction to that demand

wage growth should not have this same impact, because wage increases impact future employee cost at a rate unique to each employer, and it has no impact on trailing employee costs for a given FY. companies don't just unilaterally raise product prices the second their wage costs go up (that's how you get undercut and run out of business)--they always set prices to what the market will support.

but they DO raise their prices the second their basic material costs go up, because that impacts all of their competition at the same time