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According to National Bank of Canada’s analyst, Krishen Rangasamy, hiring is becoming increasingly expensive amidst a tightening labour market.

Key Quotes:

“Hiring is becoming increasingly expensive in the U.S. amidst a tightening labour market. Latest estimates from the Bureau of Labor Statistics show private sector compensation costs rising 2.9% year-on-year in the second quarter, the highest since 2008.”

“Wages and salaries, which account for 70% of compensation, also rose 2.9% (decade-high), while the cost of providing benefits rose 2.8% (a six-year high).”

“The Federal Reserve will feel vindicated in its stance to raise interest rates to address such broad based cost-push inflation pressures although mitigating factors, such as deflationary effects of the strong U.S. dollar, may have some doves on the FOMC call for restraint during the current tightening cycle.”