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I can't tell what this article is saying. The first paragraph says "The continued drop in labor costs", but the Fed data says it hasn't dropped, it's been goin
by refurb 4y ago
I can't tell what this article is saying. The first paragraph says "The continued drop in labor costs", but the Fed data says it hasn't dropped, it's been going up continuously.[1]
The a later paragraph says "Since the labor share [of inflation] is declining" which entirely different than "drop in labor costs".
So what's actually happening is labor costs are going up. They just aren't going up as fast as profits. Why can't they just write that?
And the examples given "oil and gas" is an odd one, since profits vary wildly. When oil costs are down, profits are down. When oil costs go up, profits go way up. It's a capital intensive industry, and that's how it's paid for. Oil is never sold at some small profit margin.
[1]https://fred.stlouisfed.org/graph/?id=ULCNFB https://fred.stlouisfed.org/graph/?id=ULCNFB,