The BLS released productivity and costs report and it show labor costs increased 3.5% year over year impacted by a 1.3 percent decrease in productivity.
Unit labor costs in the total manufacturing sector increased 3.8 percent in the third quarter of 2022, reflecting a 2.4-percent increase in hourly compensation and a 1.3-percent decrease in productivity. Manufacturing unit labor costs increased 4.3 percent from the same quarter a year ago.
On Wednesday, the Fed hiked interest rates 75 basis points and these types of reports will give them fuel to fire up another 75 basis points in December. Higher rates are already taking a toll on housing, stocks and the job market but we’ll see what happens.
What should a prudent investor do? Cash! Cash! Cash!
Until these stormy seas clear, the best thing to do is pile up cash.
Stay tuned and stay solvent…