In fact, it was shown that U.S. benefits and wages are barely going up. It was reported that this was the slowest rate of wage increase since 1982.
This is proof that constant hiring has not given employees a chance to have a more comfortable life. Bonuses and incentive pay are not escalating either. In fact, a drop-off was recorded over the last few years.
The April-June quarter only revealed a 0.2 percent increase in terms of employment cost index. This is 0.5 percent lower than the one recorded at the end of the first quarter, according to representatives of the Labor Department, who released these numbers on Friday, July 31.
Both quarters reflect the smallest gain recorded over the last 33 years, since the government started to track the data, in 1980.
“Despite a tighter labor market and all of the stories about pay increases at various large firms, wage growth is not picking up meaningfully. This may not sit well with (Fed) policymakers,” stated Jennifer Lee, who is an economist at BMO Capital Markets.
The private sector recorded disappointing figures as well, showing that it basically remained unchanged over the last few months and is also at its lowest within the previous three decades.
These figures might come as a surprise for a few analysts who thought that the index would lead to increased wages after almost two years of constant hiring . However, this index only rose by 2 percent in the April-June quarter compared to the index from 2014.
It is also alarming that the second quarter recorded lower numbers compared to the first one. The first three months of 2015 had seen a 4.6 increase, which was the highest within the last seven years.
This, in turn, will most likely affect consumer confidence, which has failed to show positive results this year. The sentiment index for July decreased by 3 percent, according to the University of Michigan. Even so, it is still above 90 percent, which is much better than it was a couple of years ago, when the economy was still unstable.
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