Wages and benefits record slowest pace in 33 years.
The Labor Department released figures Friday that show the employment cost index grew at 0.2 percent after growing 0.7 percent in the January-March period, indicating that stronger hiring is not positively impacting take-home pay for most Americans.
An article in Arkansas Online reports the index, which tracks wages, salaries and benefits, recorded its lowest rate since the second quarter of 1982. Wages and salaries alone grew at the same rate.
The numbers seem to indicate a big drop in bonus and incentive pay for some workers as well.
Private sector wages and salaries also recorded it’s weakest showing since the government began tracking such data in 1980.
The results were particularly disappointing since the index was expected to show higher after two years of steady hiring. The unemployment rate fell to 5.3 percent, down from 6.1 in June of 2014.
The numbers indicate employers are able to find the workers they need without increasing pay, a sign that the economy has not yet fully recovered. Employers have added nearly three million jobs in the last year and most economists expected that would force firms to increase pay to attract better workers.
The trend could force the Federal Reserve to re-think an increase in the short-term interest rate, expected to rise in the fall. The Fed watches the index to see if healthy hiring is pushing wages up,which could lead to producers raising their prices to consumers to cover the higher cost of labor.
In occupations where bonus or incentive pay is common, compensation fell dramatically after a first quarter spike. These include sales and professional service types of employment.
This index now matches an earlier report from the Labor Department that recorded a 2 percent growth from a year ago in average hourly pay, data released as part of the monthly job’s report.