Inflation: Actual Price Changes From 1997-2017

Despite the punditry's conventional wisdom that (finally!) rising wages are killing the market rally, the data suggest this is somewhere between exaggeration and fallacy. Which means the explanation for increased volatility almost certainly lies elsewhere. JL

Barry Ritholtz reports in The Big Picture:

Some people have been blaming inflation generally and rising wages in particular for the recent increase in market volatility. Wages have  barely ticked over the median inflation measure. Which fate awaits us: the robot-driven apocalypse where we are all out of work, or the spike in wages that sends rates much higher. Perhaps both — higher wages sends employers into the waiting arms of our automated future. I expect wages are ticking higher, but not appreciably so that the Fed must do anything drastic.
I have shown versions of this chart before but the update is worth reviewing given that some people have been blaming inflation generally and rising wages in particular for the recent increase in market volatility.
It is notable that the two big outliers to the upside are health care (hospital, medical care, prescription drugs) and college (tuition, textbooks, etc.)
Clothes, cars, TVs, cell phones, software — technology in general — showed disinflation or outright deflation in prices.(HOusing and food 7 beverage have been right at the middle of inflation levels).
Wages have  barely ticked over the median inflation measure, but that did not stop some people from blaming the correction on rising wages.
Reading the pundits, I cannot tell which fate awaits us: the robot-driven apocalypse where we are all out of work, or the inevitable spike in wages that sends rates much higher and kills the market. Perhaps both — higher wages sends employers into the waiting arms of our automated future.
Regardless, I expect wages are ticking higher, but not appreciably so that the Fed must do anything drastic. And the increased comp should accrue top sectors like retail, housing, durable goods, travel, automobiles, etc.
We are a long ways from the sort of wage push inflation of the 1990s . . .

Source: AEI