Bloomberg Surveillance · Friday, September 11, 2026
Tiffany Wilding of PIMCO suggests that AI and demographic trends, such as an aging population and retirements, are fundamentally altering the labor market. This, combined with decelerating nominal wage inflation and stable unit labor costs, provides arguments for the Federal Reserve to be patient with rate hikes.
“I think, like I said, I mean, if the labor markets are not a source of inflationary pressures right now, you look at a broad array of nominal wage inflation measures. They have been decelerating. We think AI, as well as demographic trends, you know, the aging of the population, retirements, is just having some fundamental shifts on the labor market, which is, you know, And when we adjust that for productivity, so unit labor costs, what are the marginal costs that companies have? Labor is just not an accelerating one of them.”
“You know, so maybe other non-labor costs for companies are going up, like energy, you know, but certainly we are seeing labor costs inflation that's coming down. You know, so because labor is, you know, 75 percent of the input costs of most companies in the United States, you know, I think that's why Federal Reserve officials, you patient here, you know, although hiking, but at a gradual pace, you know, because we're just not seeing, you know, those marginal cost pressures, you know, certainly that we were seeing in 2022.”