The fleeting triumph of American wage growth over inflation

US workers' real weekly earnings grew on an annual basis in June for the first time in 26 months, as inflation wanes. However, experts warn that this wage growth may not last due to concerns about its impact on inflation and the possibility of a cooling labor market. The Federal Reserve is closely monitoring wage growth and its potential to fuel inflation. While recent research suggests that wage gains have had limited effects on inflation, fears of a wage-price spiral persist. Additionally, the number of people employed part-time for economic reasons increased in June, indicating potential challenges to sustaining wage gains. Nevertheless, favorable labor market trends and cooling supply-side inflation may support workers' ability to maintain real wage gains.