Under the Hood of Surge in U.S. Labor Costs Is Robust WagesShobhana Chandra
Here’s one key takeaway from the Labor Department’s report Thursday on U.S. revised second-quarter productivity and labor costs:
Labor costs jumped a revised 4.3 percent, previously reported as a 2 percent gain, as real worker pay and benefits increased rather than declined as first estimated. Hourly compensation surged 3.7 percent, compared with an initially reported 1.5 percent advance, while hours worked were revised down slightly to a 1.7 percent pace.
The roots of the revision to compensation can be traced to the large upward revision to worker pay in the Bureau of Economic Analysis’ report on 2Q GDP, issued on Aug. 26. That showed wages and salaries climbed by $92.6 billion, up $44.2 billion from the previous estimate. The agency cited analysis of historical wage revisions that incorporate Labor Department’s quarterly census of employment and wages and an attempt to smooth out quarter-to-quarter swings.
* Real hourly compensation rose at a revised 1.1 percent annual rate, previously reported as a 1.1 percent decline * Labor costs in manufacturing jumped 6.7 percent, revised from a 3.1 percent gain * Productivity declined 0.6 percent, revised from a 0.5 percent decrease