Wall Street Journal (07/31/15) Josh Mitchell; David Harrison
Labor costs increased at the slowest pace in at least 30 years in the second quarter, an indication of tepid wage growth that could influence the U.S. Federal Reserve’s decision to boost interest rates. The employment-cost index rose a seasonally adjusted 0.2% in the second quarter from the previous quarter, according to the U.S. Department of Labor. The increase was the smallest quarterly gain since 1982, when record keeping began. Economists polled by the Wall Street Journal had forecast a 0.6% increase.
The continuing lack of momentum in wage growth suggests slack remains in the labor market. Millions of people are jobless or aren’t looking for work even though they are of prime working age. A measure of unemployment that counts those people and part-time employees who would prefer full-time work was 10.5% in June, up from 8.4% just prior to the recession.