August 6, 2026
The Bureau of Labor Statistics indicated that hourly compensation rose 2.7% in the second quarter after climbing by 2.1% in the first quarter, 3.7% in the fourth quarter and 6.2% in the third quarter In the past year compensation has risen 3.7%.
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 second quarter nominal compensation rose by 2.7% while inflation climbed by 5.8%. Hence, real compensation in the second quarter declined 3.1%. Real compensation fell 1.4% in the first quarter, climbed by 1.4% in the fourth quarter, and rose 3.0% in the third quarter. In the past year real compensation has declined 0.1%. If the economy continues to expand and productivity growth soars, real compensation should begin to climb. Workers have earned a fatter paycheck.
Stephen Slifer
NumberNomics
Charleston, SC
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