Mark Zandi

you know, wages are up too, earnings are up too, but even there, you know, there's a reason for concern.

Wage growth is slowing, right?

I mean, if you look at employment cost index, which is the best measure of wages for lots of different reasons, average hourly earnings, another measure,

The Atlanta Fed wage tracker, they're all showing deceleration in wage growth.

And aggregate wage growth now is about 3% to 3.5%.

So if inflation goes 3.5% to 4%, that means people's real wages after inflation are now going to start to decline.

And I think at that point, people become really upset and nervous.

It makes them very upset if their wages are falling relative to inflation.

And I think that's probably dead ahead here over the next six months or so.

Yeah, it goes back to that firewall.

I think it's layoffs.

I mean, our business is going to start laying off workers in the context of all the things that we are going through and what we just discussed.

And there's different measures of layoffs.

The one that economists tend to use is unemployment insurance claims.

That's a bit vexed in the current context because changes in eligibility rules have made getting UI less attractive and

The layoffs are occurring in industries where people are generally paid more, you know, technology and financial services.

And so they don't want to bother with applying for UI because, you know, there's a lot of – you have to do things to get the UI.

You have to prove that you're looking for work and so forth and so on.

So if the amount you get from UI is not consequential enough, you're just not going to do it.

And then the gig economy is also playing a role.