US Inflation to Surprise?
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Strategy Espresso
US unemployment has reached a multi-decade low of 3.7% and wage inflation is showing green shoots after a subdued period.1 Some commentators have referenced the expansion in the 1960s as a similar environment. This backdrop could suggest that an imminent take-off in wage inflation may occur due to the long-term rise in employment figures. Whilst official inflation data does not indicate CPI overheating, possible overshoot in inflation remains triggered by continued fiscal stimulus, higher prices due to tariffs, and potential for a weaker dollar.
