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Consumer spending teeters U.S. away from recession (access required)

The Fed’s biggest enemy today is the labor market. Given that we have seen prices start cooling in many sectors of the market, the remaining piece of the puzzle is wage growth. While wage growth has cooled since July, it is still up more than 6% over the last 12-months. While wage growth is fantastic for the employee, the issue is it is sticky and can get baked into prices over time; meaning while we are seeing prices cool now, if wages were to continue rising it is likely we would need to see a subsequent increase in prices in order to offset labor costs.
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