11 Comments
User's avatar
Rick M's avatar

Great write-up. I just got turned onto your site from reading about in some other source and I am really enjoying it. You write really well and have cogent arguments to back up your points. Thanks for posting!

Florian Kronawitter's avatar

Thank you Rick, far too kind to say!

L C's avatar

Great post!

The consensus market view seems to be that goods inflation has peaked and energy inflation depends on Russia-Ukraine (supply) and China's reopening (potential demand), which leaves services.

Are there any leading indicators you look at for services inflation?

Florian Kronawitter's avatar

Thanks for this. Yes- rent is a service, as are airfares, hospital bills etc. Best medium-term indicator for service inflation IMO is wage growth though, as wages biggest cost for services

L C's avatar

Thanks -- you've phrased it more concisely, and this is what I'm trying to understand better. If wages are driving services inflation, what do you think is the best 3-6 mo leading indicator for wages?

I only ask because it seems like most people are using heuristics like the vacancies-to-unemployed ratio or the monthly lagging JOLTS release, only to be surprised by the wages increases reported in real time.

Florian Kronawitter's avatar

I think weekly jobless claims best for this! JOLTS lagging

L C's avatar

Thanks so much! Love your work and approach.