Wages are increasing in the US

Wages are increasing in the US

Worker’s wages are showing signs of increase in the United States. The labor costs in the world’s largest economy increased in early months of 2015. The job market is tightening itself. U.S. inflation pressure might be one of the reasons behind it. The measure of wage and benefit expenses, employment cost index increase by 0.7 percent in the first quarter. During last quarter of 2014, its growth rate was 0.5%. The figures released by the Labor

Department are showing promising picture. The Wall Street pundits projected that the index will increase by 0.6 percent.  The monthly earnings have reported highest year over year growth since the financial crisis. Labor costs rose around 2.6 percent in the first quarter, if we go by annual basis. In the private sector, wages increased by 2.6 percent in the same quarter.  Economist Daniel Silver from J.P. Morgan Chase said that reduced slack in the job market has triggered upward trend in compensation.

The labor costs have accelerated since last few quarters.  For last five year, the increase in the wages was frozen at 2 percent growth annually. As the U.S. economy is leaving behind hangover of the financial crisis, wage increase is really a good indicator of the recovery.  But many experts are pointing out that the report released by the labor department can be over exaggerated as we have seen similar trend in the wage increase of 0.3 percent. The growth figures have increased due to incentives to workers like the sales commissions.

 

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