Real wage gains are mainly telling us about gasoline prices. From an inflation standpoint, nominal wage gains are what we are interested in, but I’d classify them as a result of labour market tightness. That is, we track other variables that hopefully allow us to predict future wage gains.
I don't follow the logic: 1) Core CPI is nearly as elevated as overall CPI, 2) nominal wage gains were very high in the 1970s (real wages gains basically zero) - was that a tight labor market despite very high unemployment?
1) This has been the first time in 30 years that core inflation has moved, while headline has had a lot of spikes in that period.
2) They had cost of living adjustments in the 1970s. The fact that they were able to get raises to match inflation while modern workers do not indicates that the unemployment rate is not the only thing that indicates labour bargaining power.
Wouldn't real wage gains be the better measure of labor market tightness?
Real wage gains are mainly telling us about gasoline prices. From an inflation standpoint, nominal wage gains are what we are interested in, but I’d classify them as a result of labour market tightness. That is, we track other variables that hopefully allow us to predict future wage gains.
I don't follow the logic: 1) Core CPI is nearly as elevated as overall CPI, 2) nominal wage gains were very high in the 1970s (real wages gains basically zero) - was that a tight labor market despite very high unemployment?
1) This has been the first time in 30 years that core inflation has moved, while headline has had a lot of spikes in that period.
2) They had cost of living adjustments in the 1970s. The fact that they were able to get raises to match inflation while modern workers do not indicates that the unemployment rate is not the only thing that indicates labour bargaining power.