Friday, October 31, 2014

Employment cost index shows some improvement on the wage front

 - by New Deal democrat

This morning the BLS released its quarterly Employment Cost Index. And the news was pretty good. Overall compensation, including benefits, rose 0.7% in the quarter.  Wages rose 0.8%.  Since consumer prices actually fell ever so slightly during the quarter, the entire increase was seen in workers' paychecks.  And it is a median, rather than mean, measure, so it is not skewed by high earners.

On a YoY basis, wages rose 2.1%, and overall compensation 2.2%.  This is the best YoY improvement during the entire recovery:

On an absolute basis, and adjusted for inflation, median wages are still below their 2009 peak, but are at their best level in 3 years:

For contrast, here are inflation adjusted average hourly wages for nonsupervisory workers, a monthly measure from the jobs report:

These have also improved and are less than 1% from their 2010 high.

Not worth three cheers, or Happy Day are Here Again.  But definitely one cheer.  As the labor market slowly tightens, as predicted wages are beginning to improve.