Surge in US labor costs forecast

A combination of rising wages and declining productivity will boost US labor costs sharply during the rest of 1980, especially in manufacturing, according to the Conference Board's labor outlook panel.

The panel, made up of eight labor experts from major corporations, unions, and academia, is considerably more gloomy now than when it issued its last forecast in December.

Despite a recession and growing unemmpoyment, these labor authorities expect increases in first-year wage and benefit packages in major bargaining units to average 9.5 percent this year, up from the 9 percent average in 1979. Unit labor costs in manufacturing are expected to climb 9.5 percent this year, compared with 8.2 percent in 1979.

As the recession deepens, panelists expect continuing deterioration in the US productivity rate, which fell 2.3 percent in the first quarter of this year.