There’s no doubt that US prices are rising and that the jobs market is tight.
Those are the two elements for a wage-price spiral; an environment where high prices lead to higher wages in a never-ending cycle that can only be broken by higher interest rates and a growth slowdown, if not a recession.
Yet Blackrock doesn’t think that is going to happen in this cycle because of high automation already in system and improving productivity. For instance, a steel mill that once faced rising wages would see margins impacted significantly. Now that industry is so automated that even a doubling […]