U.S. businesses paid sharply higher labor costs in the third quarter to produce their goods and services—even though hourly compensation for workers fell after adjusting for inflation.
So-called unit-labor costs soared 8.3 percent in the period from July through September, the Bureau of Labor Statistics said Thursday.
These costs indicate how much a business spends to produce one unit of output.
At the same time, consumer prices have been rising faster than hourly compensation, a measure that includes wages, salaries, benefits, employer contributions to benefit plans, and taxes. The Bureau of Labor Statistics said that hourly compensation rose at a seasonally adjusted, annualized rate of 2.9 percent in the quarter, near its average in the decade before the pandemic. But after adjusting for inflation, hourly compensation fell at an annual rate of 3.5 percent.
The Personal Consumption Expenditures price index rose 5.3 percent in the third quarter.
The government also said on Thursday that labor productivity, a measure of how long it takes to produce of unit of output, fell by the most since 1981.