Inflation is Pushing Up Salaries, But Who Pays the Price?

As inflation keeps rising, companies are having to raise wages. Those higher labor costs, in turn, are often passed on to consumers in the form of higher prices.

U.S. inflation accelerated in September, and in response, the Federal Reserve looks set to keep raising interest rates.

Consumer prices rose 8.2% in September compared with a year earlier.

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Core inflation climbed 0.6% from August to September and 6.6% over the past 12 months. The yearly core figure is the biggest increase in 40 years.

One side effect of rising inflation and costs is the need to increase salaries. A range of services industries, including airlines, hospitals and even veterinary services — are having to rapidly raise wages to attract the workers they need.

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Those higher labor costs, in turn, are often passed on to consumers in the form of higher prices.

Inflation has pushed up the price of everyday goods and services, from grocery bills and rents to utility costs and vacations, among other expenses. Despite strong job growth and historically low unemployment, it’s a worrying time for many people.