Bidenflation: Labor Costs Rise at Fastest Pace in 40 Years  

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The labor costs in the U.S. rose sharply in the first three months of the year, reflecting the highly inflationary environment and adding even more upward pressure on consumer prices. Unit labor costs jumped 12.6 percent in the first quarter, a big increase from the initial estimate of 11.6 percent, data from the Department of Labor showed Thursday. Economists had forecast no change from the initial estimate. Over the past year, labor costs are up 8.2 percent, the largest four-quarter gain since 1982. The Bureau of Labor Statistics calculates unit labor costs as the ratio of hourly compensation to labor productivity. Increases in hourly wages and benefits tend to increase unit labor costs and increases in productivity tend to reduce them. Labor costs tend to rise when inflation is high. Economic studies indicate that increases in broad measures of prices paid by governments, investors, consumers, and foreign purchasers of U.S. goods and services tend to push up labor costs over time.

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