Loading...
Most Recent Stories

LABOR COSTS CONSISTENT WITH LOW INFLATION

This morning’s report on productivity and labor costs confirmed the low inflation environment that is likely to persist in the year ahead.  Unit labor costs declined at a -0.6% year over year rate.  This was worse than expected.  While this is good for corporations (it ensures continuing high margins) it is bad for the labor market and potential future inflation. The negative print was a record for the post-war period as unit labor costs have now posted 8 consecutive negative quarters.  For now, it’s likely that the surging commodity costs in the USA will prove as a burden for US corporations rather than an opportunity to pass on costs.

Comments are closed.