Second, wages are rising, albeit moderately, as labor market conditions are improving and firms are feeling a shortage of labor in a relatively wide range of industries.
In contrast, unit labor costs, that is, the labor costs incurred to produce one unit of product, are still decreasing due to the increase in productivity, but the pace of decrease has clearly slowed, reflecting the moderate uptrend in wages. And third, as suggested by various survey results, inflation expectations of firms and households are shifting up.