Why Wages Are Rising While Inflation Stays Sticky

In this episode of The Macro Memo, Lucas and Luna examine a confusing signal in the latest economic data: average hourly earnings are up to $37.50, accelerating at a 3.8 percent annual rate, yet core PCE inflation is stuck at 3.3 percent. They unpack the question on every macro investor's mind — are higher wages feeding into sticky services inflation, or is the economy just absorbing the cost without passing it through? Using the April CPI and PCE releases, plus the May ADP payrolls number of 122,000, they drill into the composition of wage growth by sector and the implications for the Fed's rate path. The conversation also touches on the surge in long-term unemployment as a potential wage dampener, and what Friday's May jobs report could reveal about whether this trend is sustainable. A focused, numbers-driven look at the wage-price spiral debate as of June 2026. #WageGrowth #StickyInflation #FederalReserve #CorePCE #AverageHourlyEarnings #UnemploymentRate #ADPPayrolls #JobsReport #LaborMarket #ServicesInflation #WagePriceSpiral #MacroEconomics #FOMC #RateCuts #LongTermUnemployment #CPI #InflationData #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo