CNBC reports that compensation for workers rose to a nearly 10-year high.
The employment cost index, a gauge of total compensation for civilian workers, increased 0.6% in the second quarter. The cost of pay and benefits jumped 2.8% in the 12-month period ended in June, the highest yearly growth rate in nearly a decade.
Wages alone gained 2.8% over the past 12 months, which also reflected a near 10-year high.
Growth in benefits outpaced wages in the second quarter. Wages were up 0.5%. Benefits, which cover health care, retirement plans and other items, jumped 0.9%. That marks the fastest pace in four years.
Wages and salaries rose 0.5 percent for the quarter and 2.8 percent for the 12-month period, while benefits costs increased 0.9 percent and 2.9 percent, respectively.
Private industry compensation was up 2.9 percent, a substantial rise from the 2.4 percent recorded as of June 2017. Government compensation increased 2.3 percent for the period, which actually was a pullback from the 2.6 percent gain recorded in June 2017.
Industry-wise, sales and related jobs recorded a 3.5 percent gain while transportation and material moving rose 3.4 percent. Hospital work showed the smallest gain at 2.2 percent.
If one accepts the modern-day premise that the president of the United States of America has among his other constitutional duties making sure American workers are getting pay raises, then yes, I suppose from the above that one might conclude that Trump is doing a bang-up job as president.
For some more insight into this issue, I suggest the Marketwatch article “U.S. gains 157,000 jobs in July as unemployment falls to 3.9%” by Jeffry Bartash published Aug. 3, 2018, to wit:
Far-flung complaints about how hard it is to find good workers still aren’t inducing companies to jack up salaries and wages, however.
Hourly pay rose 7 cents in July to $25.07, but the 12-month rate of wage gains was unchanged at 2.7%.
And even those increases have been largely eaten up by rising inflation.
Wages usually rise 3% to 4% a year when the labor market is as tight as it is now.
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Is the American worker doing just great based on that?
Call me a sceptic.
Getting back to the Marketwatch article:
The economy accelerated in the spring to a heady 4.1% rate of growth, helped by tax cuts and a big burst of government spending that’s added a lot of stimulus.
“The primary reason for the hiring is increased government spending.”
“Businesses are responding to that,” contends chief economist Mark Zandi of Moody’s Analytics.
“The 12-month trend for wage inflation remained a 2.7% – weaker than expected given the ultra-low unemployment conditions,” noted senior economist Ben Ayers of Nationwide.
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Hmmmmmm.
The consumer-price index rose 0.2% in July; a reading of core prices rose by the same amount.
The 12-month rate of core inflation rose to 2.4%, the highest rate since September 2008.
Mike Loewengart, vice president of investment strategy at E*Trade, said that the CPI data “sends a signal that inflation is here to contend with.”
“Investors have reason to take caution, with stagnant wage growth this news could start affecting their wallet.”
– MARKETWATCH By Mark DeCambre and Ryan Vlastelica Published: Aug. 10, 2018
The increase in the CPI over the past 12 months was 2.9%, unchanged from June.[/b][/color]
The 12-month rate of core inflation rose to 2.4%, the highest rate since September 2008.
The steady uptick in inflation is taking a bite out of household income.
Real or inflation-adjusted hourly wages were flat in July, and they were down 0.2% over the past year.
– MARKETWATCH By Greg Robb Published: Aug. 10, 2018