Wage Growth Exceeded 3% for 11th Straight Month in August
Wages, or average hourly earnings (AHE), have risen by or exceeded 3% on a seasonally adjusted annual basis (SAAR) for 13 consecutive months. Wage growth in August exceeded 3% (SAAR) for the 11th consecutive month.
In August, average hourly earnings for all employees on private nonfarm payrolls rose by 11 cents to $28.11 after 9-cent gains in both June and July.
Over the past 12 months, wages increased 3.2% and the Labor Department reported even larger gains for lower-income workers. Average hourly earnings for production and nonsupervisory employees posted the largest monthly gain ever recorded for the series dating back to 1964.
Data indicates wage growth in 2019 is likely stronger than we current believe.
Annually revised data from the Bureau of Economic Analysis (BEA) revealed wages grew even stronger than initially reported in 2017 and 2018, the first two years under the Trump Administration.
Meanwhile, the far more moderate gains reported for the tenure under Barack Obama, were revised further down. Compensation increased 42% more during the first two years of the Trump Administration than in latter two years under the Obama Administration in 2015 and 2016.
Employee compensation rose 4.5% and 5% in 2017 and 2018, respectively. That’s roughly $4.4 billion and $87.1 billion more than initially reported.
In the fourth quarter (Q4) 2018, wages posted the biggest gain (3.1%) since Q3 2008, hitting that mark for the first time since the Great Recession.
That trend has clearly continued into 2019.
Compensation rose $378 billion, or 3.4% in the first six months of 2019. That means employee compensation in the first six months of 2019 gained $150 billion more than all of 2016.
