Goldman Sachs chief economist claimed that wage increases of between 5%-6% would not be sustained without “meaningful” inflation.

CNBC’s Jan Hatzius said Tuesday that wage growths in the U.S. must slow down as inflation rises and is a major focus of the Fed and the markets.

Hatzius said, “I believe 4% is okay. 5%-6% is likely to be difficult to sustain with meaningfully higher inflation so it needs to come down.”

Hatzius, also head of global research for Goldman Sachs, stated that the quarter-on–quarter annualized wage growth rate has been “well above” 4 percent.

He stated that “the pace of wage increases we have seen over the past couple of quarters now probably needs to slow some,” CNBC’s Squawk Box Asia.

Overall, average pay in the U.S. jumped significantly in 2021 — to more than $31 an hour, a 4.7% annual increase, the U.S. Labor Department reported in early January.

This month was earlier. Goldman Sachs CEO David Solomon said “there is real wage inflation everywhere.” Goldman Sachs has high compensation costs jumped 33% to $17.7 billion for 2021, a whopping $4.4 billion increase fueled mostly by pay increases for good performance, executives said.

Meanwhile, inflation is increasing the U.S. consumer price index jumping 7% in DecemberThe fastest rate since June 1982.

These higher consumer prices have an impact on the quality of our food into workers’ salary increases despite their pay bumps. The average worker saw a pay decrease of 2.4% last year. according to seasonally adjusted data published by the Labor Department.

The United States’ six biggest banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley and Goldman Sachs — raised some wages in 2021 and subsequently hiked expense projections for the coming year, according to a Reuters report.

Hatzius however is positive about the possibility of wage inflation decreasing.

“I think there are some reasons to believe that probably will come down because there’s some evidence … from surveys of businesses on their expectations for wage roll, that some of these recent increases [are] He said that there were more “one-off” retention bonuses, and other things that weren’t going to happen again. It’s something I consider important to monitor.