Earnings Estimate

At present, worker quit rates are running at about 2.6%/month, which results in average hourly wage growth of about 4.5%/annum. At that rate, and assuming inflation elsewhere becomes quiescent, inflation will run at about 3.5%/year, one-and-a-half points above the Fed’s desired rate. To get inflation down to 2%/year, will require average hourly wage growth to decline to 3%/year and to get that quite rates must fall further to 2.2%/month.