"What implications
does the pickup in labor costs have
for price inflation?
One possible outcome
is that increases in labor costs will largely be absorbed
by a narrowing of firms' profit margins
and not be passed on to consumers
in the form of higher prices.
The fact that
the average markup of prices
over unit labor costs
is currently high by historical standards
suggests some scope
for this outcome to occur.

If higher labor costs
are mostly absorbed by firms
and not passed on,
then workers will see the gains in their nominal compensation
per hour of work
translated into greater real compensation
per hour;

in the process, workers would capture
a greater share
of the fruits
of the high rate of productivity growth
seen in recent years."

but the the ass hoof

" The more worrisome possibility
is that tight product markets
might allow firms to pass
all or part
of their higher labor costs through
to prices,
adding to inflation pressures"

"tight product markets"
ben ???

where iz u livin'

in oligopoly
" to pass or not to pass thru "
has other less open drivers
then
pure price competition for market share

besides
why not pass thru
any how to hell with
tight markets
and
take the slow down in sales rate instead

of course the fed can tighten effective demand for those products by tightening household credit
layoffs and growing
unemployment
will self full fill
the cycle

---------------

but the simple arithematic here
is based on

first draft
numbers on stuff
like productivity
that might
just be pretextual

and corrected only after the battle is over
and real wages have been squoozen