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Wages in US increased in first quarter by most since 2006
[WASHINGTON] Wages and salaries advanced in the first quarter at the fastest pace since 2006, signalling American workers are having success seeking raises as the labour market strengthens.
The Labour Department's Employer Costs for Employee Compensation report on Wednesday showed average pay for all civilian workers climbed 4.2 per cent in the first quarter from the same period in 2014 to US$22.88 an hour. That compares with a 4 per cent year-over-year gain in the fourth quarter and is the strongest since July-September 2006.
Including benefits such as health insurance, total compensation increased 4.9 per cent in the January-March period, matching the previous three months as the biggest gain since records began in 2004.
The ECEC has shown bigger gain in worker compensation than the Labour Department's Employment Cost Index, which showed a 2.6 per cent year-over-year increase in the first quarter.
The ECI is a fixed-weight gauge of labour compensation, meaning it adjusts for changes in the composition of employment across industries and occupations. The Labour Department's ECEC data takes these shifts into account, meaning it would pick up movements in the employment landscape to lower- or higher-paying jobs.
"As such, it's a better measure of what firms are actually paying," Samuel Coffin, economist at UBS Securities in New York, wrote in a June 9 research note. "At a time when labour market dislocations have been pretty large, ECEC may pick up important shifts in compensation that the (fixed-weight) ECI ignores."