How best to gauge underlying pay pressure

If labour earnings growth took a decisive leg up, this would force central banks to rethink how long this year’s bout of higher inflation in advanced economies will last. The challenge is that the headline earnings data are affected by distortions that make it difficult to assess genuine pay pressures. This Update highlights the quirks of the data and presents alternative indicators to which we are paying closer attention. These measures suggest that underlying pay growth is much higher in the US than in other advanced economies.