ANZ: Labour Market and Pipeline Prices Point to Further US Disinflation - FJElite

Private sector average hourly earnings growth slowed to 3.5% year-on-year in June, down 0.2 percentage points since the start of the year and 0.4 percentage points since mid-2025. With job creation still concentrated in low- to average-paying roles, nominal wage growth looks likely to keep moderating, which supports the view that services inflation should continue trending lower even if energy volatility keeps goods inflation choppy. Supercore CPI in the coming months will be important in showing whether underlying price pressures are continuing to ease.

Pipeline inflation measures are also moving in the right direction. PMI and ISM surveys both suggest firms’ price pressures should ease over the next few months, with manufacturing input prices falling in June after three straight months of increases, and both manufacturing and services prices paid in the ISM survey dropping to their lowest levels since February 2026. That points to less pressure on firms to pass through higher costs to consumers and supports the view that inflation should continue to trend lower.