Worker pay and benefits rise faster than inflation, but the gap is shrinking in a weakening jobs market
Expectations of interest rate cuts due to lower wage growth may support DJIA. Historically, similar scenarios resulted in market rallies.
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Expectations of interest rate cuts due to lower wage growth may support DJIA. Historically, similar scenarios resulted in market rallies.
What happened, with direct paths to the underlying reporting
Employee compensation rose 0.8% in Q3, smallest increase pre-pandemic. Inflation increased slightly under 3%, indicating contained inflation pressures. Slower wage growth provides Fed leeway to cut interest rates further. Labor costs have not been a significant inflation source recently. DJIA showed slight decline but was set to rise in trading.
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