March 4, 2021

The Bureau of Labor Statistics  indicated that hourly compensation rose 1.5% in the fourth quarter.  It jumped 24.3% in the second quarter and then fell 5.8% in the third quarter before rising 1.5% in the fourth quarter.  The Q2 jump undoubtedly reflects the $1,200 refund checks that were distributed.  In the past year compensation has risen 6.7%

Growth in hourly compensation is a good thing, but some of that increase can be offset by inflation.  So what we are also  interested in is real hourly compensation.  In the fourth quarter real compensation declined 0.9%,  That consisted of a 1.5% increase in compensation more than offset by a 2.4% increase in inflation.  Real compensation rose 28.3% in the second quarter and then declined 10.0% in the third quarter before declining an additional 0.9% in the fourth quarter.  Over the past year real compensation has risen 5.3%..  Over the past decade real compensation has risen 1.3%

Stephen Slifer

NumberNomics

Charleston, SC