Workers’ wages are rising briskly, a factor contributing to
four-decade high U.S. inflation.
Average hourly earnings grew 5.2% in July from a year earlier, and
annual wage gains have exceeded 5% each month this year, the Labor
Department said Friday. The rapid earnings growth adds to other
evidence that employers are continuing to increase pay as they try to
find and keep workers in a tight job market.
Wage gains help consumers spend money in the face of higher prices for
restaurant meals, groceries, and lodging. But many companies are
having to pay more for labor at the same time that other business
expenses are rising, including transportation and logistics, said Omar
Sharif, head of forecasting firm inflation insights, LLC the entire
cost structure of operating a business has increased including wages,
Mr. Sharif said that’s allowing firms in a high inflation environment
to pass those costs on to consumers.
Higher wages and job growth combined with a contraction in overall
economic output are weighing on labor. Productivity is a measure of
goods and services produced per hour worked. It fell at a seasonally
adjusted annual rate of 4.6%. For its second straight quarterly
decline. The Labor Department said on Tuesday