June 3, 2021

The Bureau of Labor Statistics  indicated that hourly compensation jumped 7.2% in the first quarter after having risen 9.7% in the fourth quarter.  In the past year compensation has risen 8.3%.  That is a solid gain, but keep in mind that Q2 of last year saw compensation surge by 28.4%.  When we get second quarter data the year-over-year increase will drop to about 1.0%.

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 first quarter real compensation rose 3.3%,  That consisted of a 7.2% increase in compensation partially offset by a 3.9% increase in inflation.  Over the past year real compensation has risen  6.3%..  Over the past decade real compensation has risen 1.3%

Stephen Slifer

NumberNomics

Charleston, SC