Summary of "Workers Welcome Wage Gains, But Companies Feel Squeeze" As wages raised in the past several months, the profit decreased because of the wage inflation. The average hourly earnings have risen at a fast pace and increased 2.7% in June from a year earlier. Although increasing wages encourage workers to have more consumption, some U.S. companies are still facing trade-related tensions and unable to pass along the labor cost inflation to their customers. That discrepancy partly results from the development of e-commerce business which forces companies to offer low price and free shipping options. Discount-store operators reported higher labor costs and lower earnings than expected in the first quarter. Economists at Goldman Saches predict that the earning of companies in the S&P 500 will decline by 0.8% for every 1% increase in labor-cost. Labor costs comprise 21% of revenue for industrial companies. Thus, the increase in labor cost would reduce more earnings to these companies. In addition, some industrial companies are facing labor shortages which mean they may be forced to raise wages to attract talents.