The Fed is arguing that inflation is driven by the cost-push impacts of wage growth on service prices. This is a traditional view, but the pandemic recovery has been anything but textbook. In our view, the primary nexus is a demand-pull relationship....
This is the second piece of our vacancies series. In this piece, we refute specific vacancy-backed arguments that the Federal Reserve will need to engineer a recession in order to bring inflation under control.
August headline CPI inflation will likely come in close to the consensus forecast at -0.1% – which would be the lowest single-month reading since the onset of the pandemic.
The Federal Reserve has given job vacancy data center stage in assessing the strength of the labor market. The theoretical and empirical issues with vacancies data show that this is a mistake.