In this year’s second quarter, U.S. workers got an actual raise… so says the U.S. government.

During the quarter, worker compensation rose at an annual pace of 4.5 percent, according to the U.S. labor department’s index of employment costs.  

During the same period, the Personal Consumption Expenditures Price Index—the U.S. Federal Reserve’s preferred inflation measure—increased 3.7 percent, year over year.

Also, in June inflation slowed more than analysts had predicted. That was particularly the case in service costs, which are a gauge of “supercore” inflation—price increases due to largely domestic costs, since services rarely depend on foreign factors such as supply chains.

TRENDPOST: While the big news is that wages rose against inflation in the second quarter, the reality is that this is the first time they increased since 2021’s first quarter.

Yet, rather than blame inflation on the cheap money policy of zero interest rates and pumping in several trillion dollars to fight the COVID War when it began in 2020, for several months, the central bank has focused its interest rate increases on cooling off the labor market and slowing wage growth to beat inflation down.