One big factor contributing to the pause in rate increases was the moderation of the labor market
In both instances, there are many questions that cloud decision-making for those involved.
The Big 3 took a while to get back on track, but by 2015, “the industry had fully recovered and achieved a new record of annual sales.” Still, the shadow of the Great Recession loomed large when the 2015 and the 2019 contracts were signed. But what is the right amount if the Fed is fighting to push down inflation? Should union members be buoyed by the strength of the overall labor market, or should they be concerned that job growth is moderating? From the perspective of the automakers, how should they factor in the union desire for a shorter workweek, when technology is upending the assessment of their labor force needs?
Economists say that the combination of a deceleration of job growth, along with voluntary job quits returning to pre-pandemic levels, means that wage growth should start to ease.As employees earn more, they are able to spend money more readily, which can keep prices high. Conversely, as workers’ pay moderates, prices should weaken.
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