Labor Costs Rise Faster Than Expected in Third Quarter

MarketWatch (10/29/21) Buchwald, Elisabeth

The cost of employing the average employee increased 1.3% in the third quarter, according to the federal government. Economists surveyed by the Wall Street Journal had anticipated a 0.9% advance. Compensation rose 3.7% over the past 12 months, based on unadjusted data. Wages—comprising about 70% of employment costs—climbed 1.5% after increasing 0.7% in the second quarter. Over the past 12 months, wages have increased by 4.2% while overall inflation measured by the Consumer Price Index has risen more than 5%. Benefits increased 0.9% in the third quarter—a 2.5% rise over the past 12 months.

In the face of broad labor shortages, companies are boosting wages and offering more benefits to aid recruitment efforts. There are about 10.4 million job openings across the nation, and approximately 7.7 million people are unemployed.

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