On Tuesday, the U.S. Labor Department also said the Employment Cost Index (ECI) is rising, which analysts say could be "harbinger of inflation". The Y/Y increase in the Employment cost Index is +3.1 pct, which sounds inflationary to me only if GDP cannot grow faster. But then you already know that GDP grew at an annual rate of just +1.1 pct in the 4Q05 in the U.S., and appears to be slowing at the same time wage costs are rising.

This is the kind of data that Wall Street analysts will use when linking inflation pressures to higher metals prices. In an overheated economy, there are upward pressures on wages and on metals, but I don't see a high short-term correlation between the two. Metal prices also move up and down based on industry supply and demand factors, and USD pricing factors, and so on.

But longer-term, this data ought to be highly correlated. And with wage inflation rising, and metal prices rising, one would expect to see a tightening of the credit cycle and rising of short-term interest rates.