Wage gouging, jobs numbers, Fed blunders mean more inflation

The signs are pointing to higher inflation in the coming months.

While the Federal Reserve has declared their fight to lower inflation is over, recent data suggests that may not be the case. The combination of labor’s wage gouging, the unexpectedly strong job market and the Fed interest rate cut blunder, will cause inflation to rise.

It appears that inflation psychology, of which I have been warning for years, is starting to grip the nation. The dockworkers ended their strike after their employer agreed to give them a whopping 62% wage increase over the next six years. That’s about a 10% per year wage increase.

That’s astonishing.

More astonishing was the support that the workers received from the public. Even some conservative economists said that they see the worker’s point. I heard one say that because inflation has increased by 24% since their last contract in 2019, the workers deserve a large wage increase.

The average American sees that and starts to believe that large wage increases are deserved. What will likely follow is large wage increases for nearly all workers.

That, of course, will worsen inflation as it adds to the price-wage spiral which, years ago, I noted would be the case if inflation was allowed…