Worker Costs Rise

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What's Happening Today

Happy Friday! It's Kristin with your daily morning digest.

The cost of employing workers is on a rise, according to the latest figures from the Labor Department's Employment Cost Index (ECI). Wages and benefits for employees cost companies 1% in the last quarter of 2021. Compared to the year prior, compensation costs jumped 4%.

Companies have had to shell out more money to pay workers and offer other perks and benefits as people have been quitting at record rates, worsening a national labor shortage.

While workers in all sectors and industries have been getting pay bumps, employees in the nursing and residential care industry have seen the biggest year-over-year increase at 6.5%.

But inflation has continued to take a bite out of those pay increases, as the cost of personal expenses has also risen. The core Personal Consumption Expenditures price index, a key indicator of inflation, jumped 4.9% (excluding the cost of food and energy) last month compared to December 2020—the highest annual rise since 1983.

Be on the lookout next week as The Balance kicks off Black History Month with a feature highlighting discrimination in the housing market. Throughout the month we'll have articles and conversations on Instagram Live speaking to Black first-time homebuyers. So mark your calendar for Feb. 2, at 6 p.m. Eastern, when we chat with Brookings Metro Fellow Andre Perry about redlining, segregation, and more. We hope to see you there!

- Kristin

Editors' Picks

Inflation and Wages Rise, Spending Drops (The Balance)

Fed Is Finally Moving on Inflation, But at What Cost? (The Balance)

How Full Is the U.S. Recovery? Inflation's Impact Obscures the Answer. (The New York Times)

Have You Paid 'Junk' Bank Fees? Regulators Want To Know (The Balance)

Goldman, Google and Just About Every NYC Employer Will Soon Have To Disclose Pay Secrets (The Wall Street Journal)

Off the Charts

There's a key point to know about the relationship between bond prices and interest rates. Bonds with longer maturities are more sensitive to interest rates than bonds with shorter ones. For instance, if interest rates are rising, who wants to own the bonds that are paying lower rates for even longer periods of time? The longer the maturity, the greater the interest-rate risk.

Number of the Day

10.6% - That's how much missed rental payments decreased in states that raised their minimum wage compared with those that didn't, according to a recent study.

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