August 14, 2020
The Bureau of Labor Statistics initially indicated that hourly compensation jumped 20.4% in the second quarter after having risen 9.4% in the first quarter after having risen 3.4% in the fourth quarter. However, the Q2 jump undoubtedly reflects the $1,200 refund checks that were distributed. Expect compensation to decline sharply in Q3.
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 second quarter real compensation rose 24.8%. The second quarter increase consisted of a 20.4% increase in compensation enhanced by a 4.4% decline in inflation .