Top White House economists are optimistic that sticky inflation will be increasingly less so in the coming months as rapid wage growth continues to cool.

Why it matters: The new analysis — shared first with Axios — is part of an emerging consensus that the strong labor market is a key driver behind U.S. inflation. If that's true, the job market might have to loosen up before prices can fall to a more comfortable level.

Catch up quick: Economists studying inflation tend to look at a narrow measure of price gains, rather than the headline figures. The White House analysis looks at the services sector that excludes housing, energy and food costs.

• Fed chair Jerome Powell has said this area is the most likely to see higher labor costs from the tight jobs market — which may ultimately get passed on to consumers.

Between the lines: The White House identified parts of the service economy that are particularly sensitive to wages — think day care centers, auto repair shops, casinos and more. Others, like health insurance, aren't.

By the numbers: The Fed’s preferred inflation gauge, the personal consumption expenditures price index, rose 4.4% in the 12 months through April. Excluding food and energy, that measure rose 4.7% during the same period.

• According to new calculations by the White House Council of Economic Advisors, the "wage-sensitive" sectors accounted for a whopping 1.9 percentage points of that annual rise.
• Put another way, these sectors accounted for 41% of annual core inflation in April.

What they're saying: "[W]hile the initial pandemic runup" in overall non-housing core services inflation "was driven disproportionately (though not entirely) by the wage-insensitive components, more recently the vast majority" is among wage-sensitive sectors, according to the CEA blog post.

The intrigue: Wages are still rising across the services side of the economy, though notably more slowly than in early 2022.

• In April, average hourly earnings in the "non-housing" core services sector rose 4% from a year earlier — down more than 4 percentage points from the peak pace in January 2022. According to the CEA, that is a sign that inflation could cool further in this sector.
• The economists find that price inflation lags wage growth in the most wage-sensitive sectors by about 10 months.
• "However, we underscore our uncertainty," the economists write — noting, among other things, that inflation in other sectors could reaccelerate, as it did earlier in the pandemic.

Editor’s note: This story has been updated to clarify that the 4.4% increase in the personal consumption expenditures price index over 12 months rose to 4.7% if food and energy were excluded.

The debt ceiling deal imposes new work requirements on food-insecure Americans in their early 50s in a move that has alarmed anti-hunger advocates.

• According to the Congressional Budget Office, however, the number of people eligible for the Supplemental Nutrition Assistance Program (SNAP) will actually go up as a result of the agreement.

How it works: At the moment, work requirements are in place for able-bodied adults under the age of 50 who do not live with any dependent children. Under the new law, the age cap will be increased to 54 after 2025 — but a new slew of exemptions will also be enacted.

• Adults under 54 — including many under 50 who are covered by existing work requirements — will be exempted if they're veterans or experiencing homelessness, including individuals temporarily living in someone else's home.
• Adults under 24 will also be exempted if they were in foster care when they turned 18.

What they're saying: "[T]he agreement will provide meaningful & much-needed support for Americans who are homeless & housing insecure," tweeted HUD secretary Marcia Fudge.

By the numbers: After 2025, when the new work requirements are in full effect, the CBO has determined that "approximately 78,000 people would gain benefits in an average month, on net."

• While the new work requirements will save the government $6.5 billion between 2023 and 2033, the new exemptions will cost the government $6.8 billion over the same period.
• Overall, the cost of SNAP will rise by 0.2%, or $2.1 billion, over the decade.

The bottom line: The new SNAP work requirements do absolutely nothing when it comes to deficit reduction. But they do help veterans and the homeless.