Stronger wage increases are expected in the private sector, according to the second quarter Wage Trend Indicator released by Bloomberg BNA, a publisher of specialized news and information.
The WTI index rose to 98.67 from 98.42 in the first quarter.
"The latest WTI indicates the pace of wage growth will strengthen but probably not dramatically so," says Kathryn Kobe, an economist and consultant who maintains and helped develop Bloomberg BNA's Wage Trend Indicator database. "We're still seeing mixed signals in the labor market with small, steady job gains."
Kobe anticipates annual private-sector wage gains to hit at least 2 percent as opposed to a 1.9 percent year-over-year increase in the first quarter, according to the Department of Labor's employment cost index.
Among the WTI's seven components, the five positive contributors to the final second quarter reading are forecasters' predictions for the inflation rate, compiled by the Federal Reserve Bank of Philadelphia; job losers as a share of the labor force and average hourly earnings of production and nonsupervisory workers, cited by DOL; and the share of employers planning to hire production and service workers in the near future and the proportion of employers reporting difficulty in filling professional and technical jobs, recorded by Bloomberg BNA's quarterly employment outlook survey. The negative factors are industrial production, calculated by the Federal Reserve Board, and the unemployment rate, reported by DOL.
Throughout the course of the Wage Trend Indicator, it has predicted a turning point in wage trends six to nine months before the trends become noticed in the DOL’s employment cost index.