Wednesday, May 6, 2015
Unit labor costs increase by 1%+ in Q1
- by New Deal democrat
The price commanded by labor for a unit of output increased in the first quarter, making a new post-recession high:
This is another sign that wages are finally participating in the expansion:
The only problem with labor costs is if they outstrip the ability of the employer to absorb them and maintain a given profit level. Since other commodity prices have plummeted (brown in the graph below), and producer prices for final goods have declined but not so much (red),
employers should be OK while employees/consumers benefit from increased wages and flat consumer prices.