Labour costs surge, outstripping the Fed’s inflation goal by nearly five times
09 August 2022 - 18:41US productivity slumped for a second straight quarter as the economy shrank, driving another surge in labour costs that risks keeping inflation elevated.
With the drop in productivity, unit labour costs jumped at a 10.8% rate in the second quarter from the previous three months. The increase from a year earlier was the biggest since 1982. The unemployment rate has fallen back to its prepandemic level of 3.5% — matching a five-decade low — and job openings outnumber the unemployed by nearly two to one. The competition for workers has fuelled a jump in wages across industries, especially among lower-income workers. While hourly compensation advanced in the quarter, it fell 4.4% on an inflation-adjusted basis.