evidence: Fast forward to today. Inflation cooled quickly following the initial surge and by June 2023 was trending a bit above 3 percent (about the same range that it's in currently). And by some measures, real wage growth has turned slightly positive. The year-over-year growth rate in real average hourly earnings turned positive by mid-2023. Through May 2024, real wages are up 0.5 percent year over year. While real wage growth has turned slightly positive in recent months, the level of real wages is still below where they were at the onset of the inflation surge that we began to see in the first quarter of 2021. Simply put, real wages haven't fully caught up to the sudden burst in inflation. For example, the cumulative growth in the CPI since the beginning of 2021 is nearly 18 percent (through the first quarter of 2024). The Employment Cost Index (ECI)—one of the broadest measures of wage growth and which at least partially accounts for compositional shifts in the labor force—is up a little less than 15 percent over that period, leaving cumulative real wage growth roughly 3 percentage points below zero. This decline in real wages is unusual compared to what the ECI typically depicts. During the prior expansion, real growth in the ECI averaged around 0.5 percentage points per year. Projecting that over the period from the first quarter of 2021 to the first quarter of 2024 would have led to a cumulative increase in the real ECI of 1.5 percentage points (see figure 1).