Wages Grew 3.2%. Prices Are Forecast at 3.4%.

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Wages Grew 3.2%. Prices Are Forecast at 3.4%.
Deals Catchers
Deals Catchers • August 12, 2026
Mike LeeBy Mike Lee · 12 Aug 2026

Wages grew 3.2% last year. Inflation is forecast at 3.4%. Even if this morning’s number comes in exactly as expected, you got poorer.
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INFLATIONEight-thirty this morning
Wages Grew 3.2%. Prices Are Forecast at 3.4%.
July CPI lands at 8:30 a.m. Economists expect 3.4% annually, down from 3.5% in June. Wage growth came in at 3.2% on Friday.
That gap is the whole story, and it barely gets reported. Even the expected outcome leaves prices rising faster than pay — which is what the word stagflation describes when the job market is also weakening. July payrolls contracted by 23,000.
Core CPI, which strips out food and energy, is forecast at plus 0.2% monthly and 2.5% annually. That would be down from 2.6%, but only because it is measured against a high reading from last July.
Prices are beating pay
Annual growth, latest readings.
Here’s why it lands on your desk: if you are living on a fixed income or drawing down savings, this gap is the number that matters more than any index level. It compounds quietly and nobody sends you a statement about it.
Source: NBC News / Dow Jones poll / BLS
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THE FEDMonday
Hammack Says One Hike Probably Isn’t Enough
The Cleveland Fed president told Yahoo Finance the central bank may need to raise rates multiple times to bring inflation under control.
Her exact framing: a quarter-point increase “probably doesn’t do a whole lot for the economy.” Hammack was one of the three officials who dissented at the July meeting in favour of a hike.
Inflation peaked at 4.2% in May when the war with Iran pushed crude higher. It has fallen since, but the path down has stalled around three and a half.
Three months of inflation
Annual CPI, May through July forecast.
If you hold bonds or a mortgage you meant to refinance, the distinction matters: one hike is priced in as a possibility. A series of them is not priced in at all.
Source: Yahoo Finance / NBC News
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EARNINGSAfter the close
Cisco Reports Tonight. Applied Materials Thursday.
The last two significant AI infrastructure names of the season report this week.
Cisco speaks to networking demand inside data centres, Applied Materials to the equipment that makes the chips. Between them they cover the two layers underneath everything the market has been repricing since July.
Futures were quiet ahead of the inflation print: the Dow flat, the S&P up 0.2%, the Nasdaq 100 up 0.6%. On Tuesday the Russell 2000 eked out a gain while the large caps fell — small companies benefit most if rates come down.
The pattern from the past three weeks has been consistent: results land well, and the share price moves on what the company says it will spend next. Watch the capex line, not the headline number.
Source: TheStreet / Yahoo Finance
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Quick Hits
June was the largest monthly drop in consumer prices since April 2020 — minus 0.4%, almost entirely on energy. July is expected at plus 0.1%, so that relief was a one-month event.
Gasoline fell 9.7% in June, which is what did most of the work. Crude has since climbed back toward ninety dollars, and that feeds into the numbers with a lag.
Producer prices land Thursday and retail sales Friday. PPI is forecast at 4.9% annually, down from 5.5% — still running well ahead of consumer inflation.
Shelter costs rose just 0.1% in June, unusually mild for the most persistent component of the index. Whether that holds is the quiet question inside this morning’s report.
 
Stat of the Day
Gap between forecast inflation and last year’s wage growth
0.2pt
prices 3.4%, pay 3.2%
Forget the hot picks — protect what you’ve already built, and measure your money against what it buys rather than what it says on the statement. Because the best trade you’ll ever make is the loss you never took.
— Lee
Thanks for reading. See you tomorrow.

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