Wage indicator shows workers’ pay in holding pattern
- August 15, 2012
Wage increases for private-sector workers likely will hold roughly steady in the coming months, according to Bloomberg BNA, an Arlington-based publisher of specialized news and information.
The preliminary results for the company’s third-quarter Wage Trend Indicator (WTI) showed it declined to 98.50 from 98.67 in the second quarter.
During the past year, the indicator has fluctuated in a narrow range from 98.40 to 98.67.
(A score of 100 on the indicator was set in the second quarter of 1976.)
“The latest reading suggests the pace of wage growth will be in a holding pattern through at least the end of 2012,” economist Kathryn Kobe, a consultant who maintains and helped develop Bloomberg BNA’s WTI database, said in a statement. “The impending U.S. budget cliff, the poor situation in Europe, and weak job growth are all impacting confidence in the economy.”
Over its history, the WTI has predicted a turning point in wage trends six to nine months before the trends are apparent in the Department of Labor’s employment cost index.
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.
Kobe said she expects little change in annual wage gains overall in the private sector from the 1.8 percent increase over the year ended in the second quarter.
The WTI does not forecast the magnitude of wage growth, only the direction.