The data shows that people are really falling behind, said Jason Furman, an economics professor at Harvard University and former chair of the Council of Economic Advisers in the Obama administration.

"And they're falling behind, not because wage growth is slowing, but because price growth is so high," Furman said. "And that's a worrisome sign for the future."

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The super-tight labor market during the Covid-19 pandemic has forced employers to increase their compensation to fill open positions and hold on to their staff, though the raises aren't keeping up with the cost of living.

This is adding to concerns about the duration and pervasiveness of inflation.

The Employment Cost Index report is a favorite of the Federal Reserve, which is closely monitoring the extent to which skyrocketing inflation is boosting wages to help it determine how much to hike interest rates. The US central bank on Wednesday approved its second-straight three-quarters of a percentage point rate hike as it tries to tamp down rising prices.

The data shows that people are really falling behind, said Jason Furman, an economics professor at Harvard University and former chair of the Council of Economic Advisers in the Obama administration.

"And they're falling behind, not because wage growth is slowing, but because price growth is so high," Furman said. "And that's a worrisome sign for the future."

*

The super-tight labor market during the Covid-19 pandemic has forced employers to increase their compensation to fill open positions and hold on to their staff, though the raises aren't keeping up with the cost of living.

This is adding to concerns about the duration and pervasiveness of inflation.

The Employment Cost Index report is a favorite of the Federal Reserve, which is closely monitoring the extent to which skyrocketing inflation is boosting wages to help it determine how much to hike interest rates. The US central bank on Wednesday approved its second-straight three-quarters of a percentage point rate hike as it tries to tamp down rising prices.