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U.S. productivity gains eased and labor costs rose the most since the end of 2004, suggesting rising wages may exacerbate a pickup in inflation.
Productivity, a measure of how much an employee produces for each hour of work, increased at an annual rate of 1.1 percent last quarter after a 4.3 percent gain the prior three months, the Labor Department said today in Washington. Labor costs climbed at a faster-than-expected 4.2 percent pace, up from 2.5 percent.
The report may not be welcomed by Federal Reserve policy makers, who are forecast to forgo an interest-rate increase today in anticipation a slackening economy will stem inflation. Companies may have to keep pushing prices higher to cover rising labor expenses, which account for about two-thirds of the cost of goods and services.
BY's comment: No wonder the US goods and services are so expensive. In China I think labor expenses only account for about 25% or less of the cost of goods and services and that's why so competitive.
[ Last edited by BY on 2006-8-8 at 10:59 PM ] |
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