*This paper investigates how state-dependent pricing affects cost-push inflation within a multi-sector New Keynesian model featuring input-output linkages. Using U.S. sectoral data, I estimate sector-specific price flexibility and state dependence, revealing significant state dependence in price adjustments across most sectors. Theoretical analysis shows that state-dependent pricing can alter both the size and direction of cost-push inflation compared to non-state-dependent models. Furthermore, input-output linkages play a significant role in propagating the effects of sectoral shocks on cost-push inflation. Evaluating the quantitative impact of these findings, I highlight that state dependence plays a crucial role in shaping U.S. cost-push inflation, particularly following the Covid crisis.

**Workers, along with the risk of unemployment, face the wage risk coming from employment-employment reallocation. I examine the consequences of cyclical wage risk variation within a model incorporating search and matching frictions, incomplete markets, and nominal rigidities. In this economy, endogenous countercyclical wage risk can trigger a significant destabilizing demand feedback driven by a precautionary saving motive. I demonstrate that a dynamic job ladder amplifies the response to productivity shocks through changes in the reallocation rate and cyclical variations in relative wages. I argue that both channels are empirically plausible.