Investment Institute

Strike Price

  • 16 Octubre 2023 (7 min read)

  • We explore the risk of a further rise in oil prices after the terror attack against Israel
  • Strikes have hit their highest level in 20 years in the US. We look at real wages to gauge the risk of an inflationary catch-up in pay. The UAW strike is also illustrative of the challenges of re-industrialising amid an energy transition

The disappointing inflation print for September in the US may not be too alarming. It could be mere mean reversion after a “too good” August print. Yet, we cannot exclude that a line of resistance is emerging, under a “pincer movement” from higher oil prices combined with a still tense labour market generating persistent wage pressure.

The tragedy in Israel has raised the risk that oil prices rise further. The market reaction has been measured so far, as the lack of unity of the Arab world – a difference with the 1970s – limits the ramifications through OPEC. It is a very volatile situation though as the market ponders the effect of the likely ground operation by Israeli forces in Gaza. The capacity of the US to control the escalation is going to be crucial, but that is what Joe Biden is clearly attempting.

When it comes to endogenous inflationary forces in the US, the intensification of strikes calls for attention. A key issue though is to determine whether there is still a significant real wage gap in the US which could unleash a catch-up ahead. Average wages deflated by headline inflation have been marginally exceeding their pre-Covid level since the end of last year. Non-supervisory and production workers have seen more substantial gains, and after three years of gyrations their real wage is today roughly where it should be when prolonging the trend observed between the end of the GFC and Covid. This should bring a measure of reassurance on the capacity to tame inflation.

The interest in the strike in the auto sector goes beyond the inflation issue. Indeed, we think it illustrates very well the challenges of reindustrialisation in a context of energy transition. Still, at least the US has stopped the decline in manufacturing jobs – even before IRA. This helps with the social difficulties of sectorial reallocation. People working in manufacturing may not always be able to keep their current job, but they have a higher chance to find a similar job than during the big industrial contraction of the 1990s/2000s.

Download full article
Download report (572.04 KB)

Related Articles


Saved by Supply

  • by Gilles Moëc
  • 08 Abril 2024 (7 min read)

Plotting in the Open

  • by Gilles Moëc
  • 25 Marzo 2024 (10 min read)

Fog on the Window

  • by Gilles Moëc
  • 18 Marzo 2024 (10 min read)


    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

    Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    Neither MSCI nor any other party involved in or related to compiling, computing or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.  No further distribution or dissemination of the MSCI data is permitted without MSCI’s express written consent.

    Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales No: 01431068. Registered Office: 22 Bishopsgate London EC2N 4BQ
    In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.