UBS On-Air: Paul Donovan Daily Audio 'Average earnings, wages, and wage costs'

With US politicians temporarily behaving like grown-ups, economists can turn their minds to the real economy. Today’s US employment report means once again economists must reiterate the critical mantra—average hourly earnings are not wages. They are also very definitely not wage costs for companies. Unit labor costs, which are a lot closer to a company’s wage costs, were revised down in the first quarter. On most inflation metrics, prices were rising faster than labor costs, which is something to bear in mind when companies try to tell inflation stories.