While real after-tax personal income increased at more than a 7 percent annual rate in the third quarter, most of that gain reflected the influence of this year’s cut in taxes.
It also can be said that past downward rigidity in wages has led to the present upward rigidity. The second is that, even though wage increases have been taking place, albeit at a moderate pace, the pass-through of wage costs to sales prices has not been observed yet widely.