US wage growth points to interest rates staying higher for longer
The Federal Reserve tends to monitor real wage growth for inflationary pressures. (Real wage growth is wage growth less inflation; if wages are rising in line with inflation, real wage growth is zero).
In 2021 and 2022, real wage growth was negative as inflation surged ahead and workers were slow to negotiate payrises, probably because they were fooled into thinking inflation was "transitory". Which leads me to think the Fed deliberately used the transitory line even though they knew it wasn't true, to keep a lid on wages.
However, workers have wised up, and real wage growth has been positive for the last ten months. Here is the chart:
This gives the Fed yet another reason to hold interest rates where they are instead of cutting them. The markets are still hopeful of a rate cut in June, but I honestly think the Fed won't cut until there is a recession.