Our February CPI report clocked in at 0.4% - eerily reminiscent of where it stood when the Fed first tightened the reins to curb inflation in early 2022. So, in essence, we've come full circle, making NO tangible progress. Though, perhaps, it's the 5% hike in Fed Funds Rates that's kept inflation from breaching the 10% mark, pulling us back to a 4.8% annualized rate. Producer Price Pressure (PPI) looms even larger at 0.6% last month - often heralding CPI trends.
That's still leagues beyond the Fed's revised target rate of 2.4% (a subtle nod to abandoning the original 2% goal). And here's the rub I've explained ad nauseam: WAGES lag significantly behind inflation, yet wages also fuel inflation. So, how can we declare victory over inflation when wage equilibrium remains a distant dream?
And it's not just about wages - the US economy added 275,000 jobs last month. Since Joe Biden's inauguration in January 2021, a staggering 14,000,000 jobs have been created - an unprecedented feat for any President. And with 275,000 jobs added in a single month, we're still on track for a 3.3M annual pace, barely a dip from Biden's term average. This relentless job growth exerts immense pressure on wages and the benefits employers must dangle to attract the workforce they need.
