Wage growth on its own says nothing about inflation. Only wage growth in excess of productivity raises the cost of each unit produced, and only that excess must be passed into prices or absorbed in margin.
Because both components are revised heavily, ULC is a series to read in trend rather than in single quarters. It is nevertheless the number central bankers cite when explaining why a given wage print is or is not a problem.
Example: hourly compensation rises 4.4% while productivity rises 2.1%. ULC growth is 2.3%. Firms can hold margins with 2.3% price increases, so that wage number is compatible with roughly target inflation.
Related: productivity, average-hourly-earnings, employment-cost-index, core-pce, phillips-curve