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U.S. Wages Show Signs of Breaking Out

Wall Street Journal (12/02/15) David Harrison

American workers are starting to see distinct wage growth after years of sluggish gains, indicating that a tightening job market may be pressuring employers to improve pay packages, according to the U.S. Department of Labor. The numbers show that inflation-adjusted hourly compensation for the nonfarm business sector grew 3.4% in the third quarter, compared with the same quarter a year ago, marking the second-largest jump since the third quarter of 2009. Higher pay has also taken hold in the manufacturing sector, where real compensation climbed 3.5% in the third quarter from a year ago. Productivity has simultaneously been showing signs of improvement, growing at annualized rates of 2.2% in the third quarter, and 3.5% in the second.