February 1, 2024
The Bureau of Labor Statistics indicated that hourly compensation rose 3.7% in the fourth quarter after gaining 3.8% in the third quarter. In the past year compensation has risen 5.0-%.
Growth in hourly compensation is a good thing, but that increase can be offset by inflation. So what we are also interested in is real hourly compensation. In the fourth quarter real compensation rose 0.9% after having risen 0.2% in the third quarter. In the past year real compensation has risen 1,8%. The fourth quarter increase consisted of a 3.7% increase in compensation which was partially offset by a 2.8% increase in inflation, hence a 0.9% increase in real compensation. If the labor market remains tight compensation should continue to climb at a reasonably rapid pace. And if inflation continues to slow real compensation should consistently climb and grow at a far more rapid pace.
Stephen Slifer
NumberNomics
Charleston, SC
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