Labor market turns more disinflationary, Gregory Daco warns

Labor market turns more disinflationary, Gregory Daco warns
Slower labor costs pressure income

Gregory Daco, industry influencer, highlights that slower labor cost growth is emerging as a risk to consumer income.

He notes that the labor market is becoming increasingly disinflationary, affecting both wage growth and disposable income gains. This trend is leading to softer consumer spending across income segments, including upper-median, median, and lower-income groups.

Earlier this year, Gregory Daco reported that U.S. services sentiment weakened in March as sector inflation rose to the highest level since October 2022. The data pointed to emerging pressures within the services sector. The developments in labor markets add to these recent shifts in economic conditions.

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