The Employment Cost Index (ECI) rose 0.7 percent last quarter, following a 0.9 percent increase in the first three months of 2021, per a Friday (July 30) Reuters report. The figure that’s seen as measuring labor costs has gone up almost 3 percent in the past year, the biggest leap it’s taken in almost three years, per Reuters.
Wages and salaries are also on the rise, up 0.9 percent in the second quarter of the year ending June 30, following a 1 percent spike in the first three months of the year. These figures were up 3.2 percent from the same time last year. Benefits also increased, up 0.4 percent in the second quarter after a 0.6 percent boost from January to March.
The ECI is viewed as one of the most reliable gauges of the labor market slack among economists and policymakers, according to the Reuters report. It often accurately predicts inflation changes because it factors in adjustments for composition and job quality changes.
Per the National Federation of Independent Business (NFIB), 48 percent of small business owners are looking for more help, a record high. This figure has stifled some of the optimism as the world tries to reopen from COVID-19 pandemic lockdowns.
Per the Reuters report, Federal Reserve Chair Jerome Powell, acknowledging the worker shortage of 9.2 million unfilled positions as of the end of May, said, “Americans want to work, and they’ll find their way into the jobs that they want. It may take some time, though.”
NFIB Chief Economist Bill Dunkelberg said in June, per PYMNTS, that Main Street inflation has caused small and medium-sized businesses (SMBs) to become “uncertain about future business conditions.”
PYMNTS’ study “After Vaccines: What Mass Vaccinations Mean for Main Street Merchants” indicated that as the world returns to some type of normal, one in four Main Street SMB owners said things are back to pre-pandemic levels. Others anticipate that business will hit pre-pandemic levels before Halloween.