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According to Jack Kleinhenz, chief economist of the National Retail Federation, the next stage of economic growth will depend more on jobs.
“As the economy advances into the later months of 2021, federal aid will expire and an important focus will be placed on the labor market’s ability to generate sustained wages and salaries to support spending,” Kleinhenz said in an article published on Wednesday was released. “US consumers remain in the mood to spend, but the labor market and job creation will play an increasing role in doing so.”
The job market was extremely tense. In June, there were 10.07 million vacancies outside of agriculture, but only 9.48 million people looking for work, according to the Department of Labor’s survey of job vacancies and labor turnover. The imbalance caused wages and salaries to rise 3.2% year over year in the twelve months ended June 30, according to the employment cost index.
Kleinhenz said the higher wages employers had to pay to stay competitive in the current job market could lead to further inflation in the coming months.
Restaurant owners have shared their recruiting difficulties and retailers are already looking forward to their busiest time of year. Before the holidays, Walmart announced it would be hiring 20,000 permanent employees. Recently, the company sweetened the deal for its employees by paying special bonuses in its warehouses and covering 100% of the tuition and textbook costs for the employees. Target also increased its tuition fees last month.
Wages have also risen. Walgreens and CVS Health were among the youngest retailers to say they would raise starting wages to $ 15 an hour in the coming months. This was followed by wage increases at companies from Chipotle and McDonald’s to Costco and Best Buy.
But Kleinhenz said he doesn’t think those higher wages and benefits are anchored in the increased prices for consumers.
“Most of the recent spike in US inflation has been mainly driven by supply chain bottlenecks and low inventory levels, but high labor costs are often passed on to consumers and are seen as a precursor to wider inflation,” he said.
Kleinhenz doesn’t think the spreading delta variant of Covid-19 will cause the corporation to lower its retail sales forecast, although it could disrupt retail sales slightly. The NRF expects retail sales to grow between 10.5% and 13.5% this year from 2020 onwards.