W.H.’s Bernstein: Inflation Is Down Two Thirds from Its Peak, that Is Leading to ‘Real Wage Gains’

EXCERPT:

BERNSTEIN: "And as I just mentioned, I think we should consider the dynamics in answering your question. So, it’s not just a standalone labor market, of course. It’s key to this flywheel mechanism that I described. Strong labor market delivering strong nominal real — I’m sorry, nominal wage gains. At the same time, inflation has been coming down with some speed. That’s one of the reasons for Jan downgrading his recession probability, okay? So inflation is down two thirds from its peak. That is leading to real wage gains. Wages beating prices, that supports disposable income and that supports consumer spending, which is 70% of the economy. So I like the momentum we have, but, yes, of course we’re going to look carefully at any of these anecdotes, but end of the day, you know, we’re going to focus on the data."