U.S. Employment Costs, 2021 Biggest Growth in 20 Years-Wages Raise-Bloomberg

Employment costs in the United States showed solid growth for two consecutive quarters last October-December (fourth quarter). With businesses competing for a limited labor supply, the rate of increase in labor costs in 2021 was the highest in 20 years for the whole year.

Key Point
Employment cost index (seasonally adjusted) for October-December increased by 1.0% from the previous quarter Median economist forecast for Bloomberg survey rises 1.2% Increased 1.3% in July-September Maximum growth following 2001 when quarterly data was released 4.0% increase from the previous year-the largest in 20 years

Changes in the employment cost index (upper row is year-on-year, lower row is year-on-year)

U.S. Department of Labor

Rewards increased in a wide range of industries from October to December. Of the employment cost index, wages and salaries of non-military workers increased by 4.5% from the previous year. It recorded the highest rate of increase following 2001 when comparable data were published.

The continued steady growth of the index indicates that businesses have no choice but to raise wages to secure employees once morest the backdrop of tight labor supply and demand. In some cases it can put pressure on profits, but many companies are passing those costs on to consumers through price increases.

Wages and salaries in the private sector rose 1.2% quarter-on-quarter and 5.0% year-on-year.

See the table for details on statistics.

Original title:U.S. Employment Costs Climb in 2021 by Most in Two Decades(excerpt)

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