March 5, 2026
The Bureau of Labor Statistics indicated that hourly compensation rose 5,7% in the fourth quarter afterclimbing 3.3% in the third quarter In the past year compensation has risen 4.1%.
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 3.1% after having risen 0.2% in the third quarter. In the past year real compensation has risen 1.3%. The fourth quarter increase consisted of an increase in compensation of 5.7% which was partially offset by a 2.6% increase in inflation, hence a 3.1% increase in real compensation. If the economy continues to expand and productivity growth soars, real compensation should continue to climb. Workers have earned a fatter paycheck.
Stephen Slifer
NumberNomics
Charleston, SC
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