Workers Likely to See Little Change in Wage Gains, WTI Says
ARLINGTON, Va., March 19, 2013 /PRNewswire-USNewswire/ -- Private sector workers in the coming months are likely to see little or no change in annual wage gains from their recent pace, according to the revised first quarter Wage Trend Indicator™ (WTI) report released today by Bloomberg BNA, a leading publisher of specialized news and information.
The index rose to 98.72 (second quarter 1976 = 100) in the first three months of 2013 following declines in each of the two previous quarters. Over the past seven quarters, the WTI has fluctuated, staying within a range of 98.47 to 98.75.
"We are seeing some positive signs in the labor market, but there are still a lot of uncertainties in the economy," economist Kathryn Kobe, a consultant who maintains and helped develop Bloomberg BNA's WTI database, said. "The federal budget sequester that appears to be in place for the rest of the fiscal year is going to put a crimp in things for a while," Kobe said.
Kobe said she expects little or no change in the pace of annual wage gains in the private sector from the 1.7 percent increase over the year ended in the fourth quarter, as measured by the Department of Labor's employment cost index (ECI). The WTI does not forecast the magnitude of wage growth, only the direction.
Over its history, the WTI has predicted a turning point in wage trends six to nine months before the trends are apparent in the ECI. A sustained increase in the WTI forecasts greater pressure to raise private sector wages, while a sustained decline is predictive of a deceleration in the rate of wage increases.
Reflecting mixed economic conditions, four of the WTI's seven components made positive contributions to the revised first quarter reading, while three factors were negative.
Contributions of Components
Among the WTI's seven components, the four positive contributors to the revised first quarter reading were the share of employers reporting difficulty in filling professional and technical jobs, measured by Bloomberg BNA's quarterly employment outlook survey; average hourly earnings of production and nonsupervisory workers and the unemployment rate, both from DOL; and industrial production, reported by the Federal Reserve Board. The three negative factors were forecasters' expectations for the rate of inflation, compiled by the Federal Reserve Bank of Philadelphia; job losers as a share of the labor force, from DOL; and the share of employers planning to hire production and service workers in the coming months, also from Bloomberg BNA's employment survey.
Bloomberg BNA's Wage Trend Indicator™ is designed to serve as a yardstick for employers, analysts, and policymakers to identify turning points in private sector wage patterns. It also provides timely information for business and human resource analysts and executives as they plan for year-to-year changes in compensation costs.
The WTI is released in 12 monthly reports per year showing the preliminary, revised, and final readings for each quarter, based on newly emerging economic data.
More information on the Wage Trend Indicator is available on Bloomberg BNA's WTI home page at http://www.bna.com/wage-trend-indicator-p12884902670/.
The next report of the Wage Trend Indicator™ will be released on Tuesday, April 16, 2013 (final first quarter)
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Dr. Joel Popkin, who is acknowledged as one of the country's foremost authorities on the measurement and analysis of wages and prices, developed the WTI for Bloomberg BNA. Formerly an official with the Bureau of Labor Statistics, Dr. Popkin has been an analyst observing and predicting the U.S. economic outlook for 40 years. Kathryn Kobe, who worked with Popkin in designing the indicator for Bloomberg BNA, is director of price, wage, and productivity analysis at Economic Consulting Services LLC.
To obtain Wage Trend Indicator™ reports by e-mail on a regular basis, contact Jerry Walsh, BNA Research & Custom Solutions, 800-372-1033.
SOURCE Bloomberg BNA