ARLINGTON, Va., Oct. 13, 2011 /PRNewswire-USNewswire/ -- The rate of private sector wage growth should improve modestly in early 2012, according to the final third quarter Wage Trend Indicator™ (WTI) released today by BNA, a leading publisher of specialized news and information.
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The WTI climbed to 98.36 (second quarter 1976 = 100) from 98.21 in the second quarter, marking the forward-looking index's fifth consecutive gain.
"The latest WTI is signaling upward pressure on wages in the coming months, although the economy is going to need to improve a bit," economist Kathryn Kobe, a consultant who maintains and helped develop BNA's WTI database, said. "Right now, we're still looking at incrementally slow progress in the labor market," Kobe said.
Even with the pickup in wage gains, the annual rate of growth for private sector workers is not expected to exceed 2.0 percent. In the second quarter, the most recent data available show wages and salaries grew 1.7 percent year-over-year, as measured by the Department of Labor's employment cost index (ECI).
Reflecting recent labor market conditions, six of the WTI's seven components made positive contributions to the final third quarter reading, while one factor was negative.
Over its history, the WTI has predicted a turning point in wage trends six to nine months before the trends are apparent in the ECI. A sustained decline in the WTI is predictive of a deceleration in the rate of private sector wage increases, while a sustained increase forecasts greater pressure to raise wages.
Contributions of Components
Of the WTI's seven components, the six positive contributors to the final third quarter reading were the unemployment rate, job losers as a share of the labor force, and average hourly earnings of production and nonsupervisory workers, all reported by DOL; the share of employers planning to hire production and service workers in the coming months and the proportion of employers reporting difficulty in filling professional and technical jobs, both tracked by BNA's quarterly employment outlook survey; and economic forecasters' expectations for the rate of inflation, compiled by the Federal Reserve Bank of Philadelphia. The negative factor was industrial production, measured by the Federal Reserve Board.
BNA's Wage Trend Indicator™ is designed to serve as a yardstick for employers, analysts, and policymakers to identify turning points in private sector wage patterns. It also provides timely information for business and human resource analysts and executives as they plan for year-to-year changes in compensation costs.
The WTI is released in 12 monthly reports per year showing the preliminary, revised, and final readings for each quarter, based on newly emerging economic data.
More information on the Wage Trend Indicator is available on BNA's WTI home page at http://www.wagetrendindicator.com.
The next report of the Wage Trend Indicator™ will be released on Wednesday, November 16, 2011 (preliminary fourth quarter)
BNA is the largest independent publisher of specialized news, analysis, and reference services for professionals. BNA analysts produce more than 350 news and information products, including the highly respected Daily Labor Report, U.S. Law Week, and Daily Report for Executives.
Dr. Joel Popkin, who developed the WTI for BNA, is acknowledged as one of the country's foremost authorities on the measurement and analysis of wages and prices. Formerly an official with the Bureau of Labor Statistics, Dr. Popkin has been an analyst observing and predicting the U.S. economic outlook for 40 years. Kathryn Kobe, who worked with Popkin in designing the indicator for BNA, is director of price, wage, and productivity analysis at Economic Consulting Services LLC.
To obtain Wage Trend Indicator™ reports by e-mail on a regular basis, contact Jerry Walsh, BNA PLUS, 800-372-1033.
SOURCE BNA
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