A record 70% of U.S. firms reported paying higher wages the first quarter of 2022, according to a survey by the National Association for Business Economics. The April result represents the highest share of respondents in the survey’s 40-year history. It’s also the seventh consecutive survey where the number of respondents reporting higher wages increased.

Inflation is also at a 40-year high, a driver for workers demanding higher wages to keep up with increasing costs of living. But the cycle just continues. The majority of economists surveyed indicate their firms are passing on higher wage and material costs to customers.

Specifically, 45% said firms are passing on some cost increases, while 15% reported successfully passing on all or most of the increased cost. About half of respondents said they expect their company’s prices to increase even more the next three months.

“Cost pressures are starting to impact profitability as well,” said Jan Hogrefe, NABE Business Conditions Survey Chair and chief economist at Boeing Commercial Airplanes. “The April 2022 survey reflects the smallest share of panelists reporting rising profits since October 2020.”

The vast majority reported rising materials costs for companies, with no respondents claiming material or wage costs decreased over the first quarter. Despite inflationary pressures, economists said sales are strong and only 13% predicted a more than 50% chance of a recession in the next year.

A March employment report showed overall wages were up 5.6% compared with a year ago, well above normal but still far below 8.5% inflation.