Average hourly wages came higher than expected for the second straight month in May to spur inflationary concerns, Bloomberg reported.
- The latest wage figures raise the possibility of a wage-price spiral as higher wages drive more spending growth. This then hits production and hikes business costs.
- Average hourly earnings stood at $30.33 in May versus $30.18 in April and $29.74 the same month in 2020.
- Average weekly earnings for the month came in at $1,058.52 from $1,053.28 in March and $1,031.98 in May 2020.
- Employers have been forced to pay more or offer sign-on bonuses to entice applicants due to the shortage of workers willing to work at current prices.
- Workers at restaurants and bars have also recorded more tips as customers returned after being in lockdown, contributing to wage increases.
- An economist said an upward movement in wages could make a “transitory” uptick in inflation permanent, but Federal Reserves officials are in denial.
- Several companies have already announced price increases after wage increases, showing the relationship between the two.