Bloomberg Index Says Wage Growth to Increase in 2014
Bloomberg BNA’s Wage Trend Indicator (WTI) predicts an accelerated growth in income during the second half of 2014. After consecutive quarters with flat wages, the index rose from 98.7 in Q3 2013 to 98.78. Private-sector wage growth is expected to be 2 percent over the coming months, higher than the 1.8 percent year-over-year gains demonstrated in the third quarter.
“We are beginning to see some improvements in the labor market, with the unemployment rate falling to 7 percent in November,” said economist Kathryn Kobe, a consultant who maintains and helped develop Bloomberg BNA’s WTI database.
The three positive components measured by the index in the fourth quarter were the unemployment rate, average hourly earnings of production and non-supervisor workers, and the portion of employers having difficulty filling professional and technical jobs. The three negative components were job losses as a share of the labor force, the number of employers planning to hire production and services workers over the next several months, and industrial production. The single neutral component was expectations of the rate of inflation.
The Bloomberg BNA index is published monthly to discover trends in wage growth prior to the official employment cost index released by the U.S. Bureau of Labor Statistics.