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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Apr 24 2014

Earnings Growth and Inflation

Given the ongoing taper, the Fed, like most other observers, remains optimistic about economic prospects. Accordingly, a number of economists are focusing on “bullish” indicators of employment and inflation, particularly growth in average hourly earnings (AHE), which has been rising since late 2012. In theory, this strengthening suggests that there is less slack in the labor market and wage growth is rising.

Yet is the rise in AHE growth actually indicative of strengthening labor market fundamentals, particularly inflationary pressures? ECRI’s latest report uses its cyclical framework to delve deep into this issue, revealing what today’s rising AHE growth truly implies about income growth and inflation.

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Failure to Launch

ECRI February 8, 2014

As ECRI had predicted, the recent consensus that the economy was "taking off" has turned out to be dead wrong, with U.S. growth falling sharply of late. More