As prices for products including gas, steaks, bacon and camping equipment climb rapidly, eating into paychecks and dominating headlines, consumers are more likely to take note and ask for better pay.
“Things change completely when inflation is a big number,” Mr. Blanchard said. “Salience changes.”
There are signs that wages are feeding into price increases, at the margin. Prices have recently begun to rise sharply for core services, a set of purchases outside of health care, rent and transportation for which wages tend to make up a major cost of production.
“That was concerning,” said Alan Detmeister, an economist at UBS who formerly led the Fed’s wage and price section. But, he added, it is hardly conclusive.
More anecdotally, stories of workers winning big wage increases in a tight labor market abound.
While wages in lower-qualification fields like leisure and hospitality have been rising rapidly for months, professional pay may also be on the cusp of picking up: Banks have been making big base salary increases, and Amazon will raise its maximum base salary for corporate and technology workers to $350,000 from $160,000 as it competes for a limited pool of highly trained employees.
Amazon, which has also increased wages for warehouse employees, has raised prices partly in response.
“With the continued expansion of Prime member benefits and the increased member usage that we’ve seen, as well as the rise in wages and transportation costs, Amazon will increase the price of our Prime membership in the United States,” Brian T. Olsavsky, the company’s chief financial officer, said on a Feb. 3 earnings call. The monthly price is rising to $14.99 from $12.99, and the annual membership is jumping to $139 from $119.
“This is our first price increase since 2018,” Mr. Olsavsky noted.
Other companies are raising pay but have said they are covering the climbing costs by improving efficiency. That’s the sort of sweet spot the White House and the Fed are hoping for, because it could leave workers earning more without pressuring prices relentlessly up.
“We do anticipate when we do our annual review process that we will have a nominally higher wage rate increase provided to our associates,” Kevin Hourican, president and chief executive at the food distributor Sysco, said on a Feb. 8 earnings call. “And we have productivity improvement efforts that can help offset those types of increases.”