We are on the lookout for signs that inflation might be peaking. It’s hard to find any when we look at the price and wage data on a y/y basis. However, there are hopeful signs in numerous 3-month percent changes at annual rates. Consider the following:
(1) WAGES. On a y/y basis, today’s employment report showed that average hourly earnings for all workers rose 5.5% through April. However, the 3-month wage inflation rate has been falling below this rate for the past three months and was down to 3.7% during April. The same can be said for the 3-month wage inflation rate in goods-producing industries (4.1% vs 5.2% y/y) and service-providing industries (3.6, 5.6). (See the three charts below.)
