Quarterly Increase in U.S. Worker Pay Smallest on Record

[marmar]

(Bloomberg) Wages and salaries in the U.S. rose in the second quarter at the slowest pace on record, dashing projections that an improving labor market would boost pay.

The 0.2 percent advance was the smallest since records began in 1982 and followed a 0.7 percent increase in the first quarter, the Labor Department said Friday. The agency’s employment cost index, which also includes benefits, also rose 0.2 percent in the second quarter from the prior three months.

Federal Reserve Chair Janet Yellen and her colleagues are counting on rising wages to boost the economy and bring inflation closer to their 2 percent goal. The setback may prompt some officials to call for a delay in raising interest rates for the first time since 2006.

“You’re really not building up the tightness that everyone says,” said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York, who projected the overall ECI would rise 0.5 percent, among the lowest estimates. “For the people who were saying the Fed’s got to raise rates in September, this is a shock,” ..................(more)

http://www.bloomberg.com/news/articles/2015-07-31/worker-pay-in-u-s-rises-0-2-smallest-gain-in-records-to-1982

[Autumn]

1. What a surprise.

Not really.