While Goldman's equity analysts chose to lecture their clients about margin compression following a flurry of S&P 500 stalwarts lowering their earnings guidance, the investment bank's economists also warned Monday that stubborn wage pressures are making them "more concerned about the inflationary outlook."

Wage growth is still running at an annualized pace of 5-6% months after generous pandemic-inspired unemployment benefits expired, a stubbornness that has surprised many on Wall Street. Partly as a result, they expect their inflation dashboard to continue to highlight lingering supply chain woes, hot wage growth, strong rent growth, very high year-on-very core PCE and especially core CPI inflation, and very high short-term inflation expectations."

Goldman's team produced charts showing how COVID case numbers have coincided with a rise in the CPI and PCE, two popular gauges of headline inflation, while also breaking down how the costs of "other services" (the most wage-sensitive category) have been the biggest individual driver of price pressures.

Goldman's team aren't the only ones on Wall Street who are growing increasingly worried about wage inflation. Even the WSJ offered some thoughts on the subject this weekend when it published a lengthy "Weekend Interview" by Mene Ukueberuwa purporting to examine the "Underside of the Great Resignation". As Ukueberuwa quickly points out, the labor-force participation rate in the US has been stuck at 61.9%, 1.5 points below its pre-pandemic level, since August 2020.

Is it perhaps too early to start to question whether the post-COVID "Great Resignation" narrative simply isn't enough? While some bankers might disagree, a growing number of academics and experts have started to question whether structural factors in the US economy might become major impediments in the recovery of the labor market.