Don't Panic About the New U.S. Wage Data Just Yet

Friday's release of the Employment Cost Index brought crummy news: Wages and salaries in the U.S. rose in the second quarter at the slowest pace since records started in 1982. A look under the hood helps dissuade drawing any dire conclusions about the state of the labor market and the potential for a Federal Reserve interest rate increase in September.

First and foremost, the underwhelming 0.2 percent pickup in the ECI's wages measure followed a 0.7 percent increase in the first quarter. Volatile sales-related positions, which boosted the early-year figure, turned down in this report, so the disappointment partly owes to bumpiness in the data. What's more, the second-quarter data don't mesh with a broader set of measures that still show a slow but steady pickup in pay this year.