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| Wage inflation remains low |
Employers continue to have the upper hand in controlling
labor costs, as the government’s broadest gauge showed that private industry
wages and salaries have increased only 2.4% and costs for benefits have risen
only 2.2% over the past year.
While job growth continues to be strong and the unemployment
rate falls, employers continue to find workers without having to steeply
increase pay rates or provide more expensive benefits to attract and retain
their employees.
Gains in wages actually slowed in the second quarter of 2017
with the Employment Cost Index’s quarterly report on private industry wages and
salaries recording a seasonally adjusted increase in June of 0.5% as compared
to a 0.9% increase for the first quarter of the year.
Benefit costs rose by 0.6% over the three months ending in
June, the same percentage increase recorded for the previous quarter.
For workers in the South, private industry wages rose at a
slower pace than for the nation as a whole, increasing 1.7% for the 12 months
ending in June.
In comparison, the Consumer Price Index for All Urban
Consumers (CPI-U) has risen 1.6% for the U.S. and 1.5% for the South Region in the
12 months ending in June.
As a result, the costs for employing workers continues to
rise faster than the overall inflation rate, although the rate of increase for
labor costs remain subdued.
Some economists believe that without a substantial increase
in wage inflation resulting in larger take-home pay for workers, overall
inflation will remain below the Federal Reserve’s target of 2%.
