Anemic Wage Growth Restraining the U.S. Economy
29 Abril 2016 - 6:20PM
Dow Jones News
Years of solid job gains are failing to produce a breakout in
wages, suppressing the spark needed for a sustained pickup in
economic growth.
U.S. employers for the past four years created more than 200,000
jobs a month on average. That has driven the unemployment rateÂ
down to 5% last month from above 8% in early 2012.
But wages have shown little progress. Wages and salaries for
private-sectors workers advanced 2% in the first quarter from a
year earlier, the Labor Department said Friday. The measure has
grown near that rate, on average, since the start of 2012.
The U.S. economy, like much of the globe, is stuck in a
slow-growth rut. Turmoil overseas and still-weak commodity prices
are preventing the manufacturing, trade and energy sectors from
supporting growth. That leaves U.S. consumers to boost the
expansion. But without accelerating wages, it's difficult for them
to step up spending.
"We continue to be on track for very slow progress," said BNP
Paribas economist Laura Rosner. "That's reflected in the lack of
wage growth."
Economists harbor little hope for a significant economic rebound
this spring, though they do expect some pickup after a
disappointing winter performance when the economy expanded at a
0.5% pace. Forecasting firm Macroeconomic Advisers projects gross
domestic product to advance at a 2.1% pace in the second quarter.
Such an acceleration would only bring growth roughly back in line
with the overall pace of the lackluster expansion.
Overall compensation for all workers, a figure that includes
benefits, rose 1.9% from a year earlier, the Labor Department said.
Federal Reserve officials watch the gauge for signs of labor-cost
inflation.
The reading has been consistently stronger than overall
inflation. Consumer prices rose 0.8% from a year earlier in March,
a separate Commerce Department report said Friday. But the
compensation growth remains small compared with the pace of
increases during the previous expansion. From 2002 through 2007
compensation averaged better than 3% annual growth.
Another measure of wages, average hourly earnings for
private-sector workers, shows slightly stronger gains, up 2.3% in
March from a year earlier. But that, too, is little changed from
recent years. Four years ago, in March 2012, the annual gain was
2.1%.
Some employers that hire low-wage workers say they are seeing
increased pressures tied to minimum-wage increases in 26 states
since the start of 2014. But other firms say there's been little
change.
Wage pressures are "nothing really any different than we've seen
in the past," Jeff Shaw, executive vice president for store
operations at O'Reilly Automotive Inc., told investors Thursday.
"There's always a scramble for great people in the market.
But…really no changes that we've seen."
Several factors are constraining wage growth.
The unemployment rate might not fully reflect the degree of
slack in the labor market. Some older workers and those displaced
during the recession have returned to the workforce recently, and
that makes it difficult for existing workers to demand higher
pay.
And productivity growth in many service fields has been low,
meaning even small wage gains can feel expensive for employers in
those sectors, said BNP's Ms. Rosner. That could partially reflect
global cost pressures due to services that can more easily be
provided from overseas, via the Internet and call centers, she
said.
Weak wage gains are at least partially responsible for
lackluster spending. Overall consumer outlays increased just 0.1%
in March from February. Accounting for price increases, spending
was flat for the second time in three months, Commerce Department
data showed. The same report showed consumers are increasing
savings at a faster rate than spending, a potential sign of shaky
confidence.
The University of Michigan's gauge of U.S. consumer sentiment,
also released Friday, declined in April to its lowest level in
seven months.
"Consumer mood and spending have been rather subdued recently
due to volatility in the stock market and rising pump prices,
despite well received employment reports," said IHS economist Chris
Christopher. But he forecasts better April spending, "so long as
the stock market behaves itself, second-quarter consumer spending
is likely to be significantly stronger than the first quarter."
Write to Eric Morath at eric.morath@wsj.com
(END) Dow Jones Newswires
April 29, 2016 17:05 ET (21:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
O Reilly Automotive (NASDAQ:ORLY)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
O Reilly Automotive (NASDAQ:ORLY)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024