From a business perspective though, higher labor costs mean lower profits. Rising wages also place upward pressure on inflation, forcing the Federal Reserve to raise interest rates faster to keep inflation near its two percent target. Capital costs for businesses are increasing. Fiscal stimulus measures, both tax cuts
Recent equity market volatility, and the fall of key business confidence measures to levels signaling a slower pace of
An aging population means slower labor force growth, especially among workers in jobs not requiring college degrees who are retiring in large numbers. To compensate, firms will have to help workers become more productive through well-chosen investments and improved business practice. Between 2019 and 2028, the U.S. economy is likely to average 2.1 percent annual growth, a figure that can be reached only if businesses overcome demographic headwinds by finding innovative ways of boosting labor productivity.
Source: The Conference Board, www.conference-board.org, published with permission.
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