Wages Jump by Largest Amount in 10 Years
October 31, 2018
Wages and salaries in the last 12 months through September were up 2.9 percent, according to the Labor Department. This is the largest single-year increase since 2008.
Wages and salaries, which make up 70 percent of total employment costs, increased 0.9 percent in the third quarter of 2018, a much larger increase than the second quarter’s 0.5 percent increase.
The unemployment rate is the lowest it has been in almost 50 years, and the nation is viewed as being close to full employment, but wage increases have been sluggish in comparison. Q3’s wage numbers suggest that wage growth is catching up with the rest of the economy, but may also predicate rising inflation. The Labor Department’s Employment Cost Index increased 0.8 percent. This index is widely considered to forecast the inflation rate.