Can wages and prices go up in the US?

As the prices of products including gas, steak, bacon and camping gear rise rapidly, eating into wages and dominating the headlines, consumers are more likely to notice and demand. pay higher wages.

“Things change completely when inflation is a big number,” Mr. Blanchard said. “Changes in Resilience.”

There are signs that wages are rising, at the margins. Prices have recently begun to surge for core services, a group of purchases beyond health care, rent and transportation where wages tend to account for a major cost of production.

“That’s worrisome,” said Alan Detmeister, an economist at UBS who previously led the Fed’s wages and prices division. However, he added, that is hardly conclusive.

More anecdotally, there are many stories of workers getting big pay rises in a tight labor market.

While wages in lower-skilled sectors such as entertainment and hospitality have been rising rapidly for months, professional wages can also be at their peak: was done big base salary increase and Amazon will raise its maximum base corporate and technology staff salaries from $160,000 to $350,000 as it competes for a limited pool of highly trained employees.

Amazon, which has also raised wages for warehouse workers, raised prices in part in response.

“With the continued expansion of Prime member benefits and the increased membership usage we’ve seen, as well as the increases in wages and shipping costs, Amazon will increase membership prices Our Prime in the United States,” Brian T. Olsavsky, the company’s chief financial officer, said on a February 3 earnings call. The monthly price is going up to $14.99 from $12.99, and the annual membership is up to $139 from $119.

“This is our first price hike since 2018,” Olsavsky noted.

Other companies are raising wages but say they are offsetting the escalating costs by improving efficiency. That’s the good point the White House and the Fed are hoping for, because it can get workers to earn more without putting pressure on prices to rise relentlessly.

Kevin Hourican, president and chief executive officer at food distributor Sysco, said: “We anticipate that when we run our annual review process, we will see higher than nominal wage increases for communities. its own”. February 8 earnings call. “And we have productivity improvement efforts that can help offset those kinds of increases.”