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


Charleston, SC