One of the most sensitive prices in the domestic economy is manufacturing wage rates, given the magnitude and efficiency of global trade in manufactures. Since the early 1990s, of course, manufacturing wages in the US have been hammered by the Great China Wage Deflation.
Then again, China’s rice paddies have been largely drained of its latent pool of cheap industrial labor—-so the next phase of the Inflation Saga is that central banks are about to be hoisted from their own petard. That is, they claim to be striving for 2.00% inflation (lately) averaged over time, and they are about to get it good and hard.
That is evident in spades in the manufacturing hourly wage rate data contained in today’s August jobs report. The YoY gain rounded to 5.0%, representing the highest gain since March 1982. That is, since the tail end of your Grandfather’s Inflation of the 1970s!