Tucked within the latest Bureau of Labor Statistics (BLS) report is a particularly troubling factor amid rising concerns about inflationary prices.
According to research, hourly compensation has increased more than expected during the first quarter of the year, suggesting that inflation could be a bigger problem than some economists and Biden administration officials have described. Compensation figures include everything from wages and salaries to employee benefits and taxes.
Another unexpected increase
The BLS figures released on Friday included the second update in hourly compensation statistics. Now, the agency believes the rate actually increased 7.2% between January and April.
Initially, the bureau reported that hourly compensation increased by just 1.3%. That number was subsequently increased to 5.1% and finally to the most recent upward revision.
The single sector responsible for much of the increase appears to be manufacturing wages, which jumped 8.9%, according to the latest reports.
Durable goods manufacturing compensation, in particular, is up a whopping 11.7%. Numbers across the board are significantly higher than original estimates.
The fact that the latest increase is more than five times higher than the original report suggested has been interpreted by many experts as a cause for alarm.
As Breitbart explained, rising compensation can clearly be a direct benefit to workers “but can add to inflationary pressures, particularly when the rise of compensation outpaces the output of business.”
In such a scenario, bigger paychecks are not enough to offset the increasing cost of goods and services.
The labor bureau’s report appears to warn of exactly such signs, indicating that business output numbers have remained virtually unchanged since the first report. Making matters worse, the U.S. economy once again underperformed expectations, as revealed in the most recent unemployment numbers.
Experts had predicted that somewhere north of 600,000 jobs would be added to the economy last month, but that number is believed to be closer to 559,000. This followed April’s report, which was even more disappointing.
Following April’s underwhelming numbers, President Joe Biden attempted to tamp down expectations, declaring: “When we came into office, we knew we were facing a once-in-a-century pandemic and a once-in-a-generation economic crisis. And we knew this wouldn’t be a sprint, it would be a marathon.”