Today the BLS updated its broadest (and most useful) measure of wage growth, the quarterly employment cost index. This measure takes into account changing composition of aggregate employment and other factors that can tend to skew average hourly earnings up or down. It comes in three flavors: wages and salaries only, benefits only, and total compensation (total compensation and wages and salaries combined). Wages and salaries only are the best cash wage growth measure. The news was good. As shown in the chart below, the ECI of wages & salaries only (excluding benefits) for all private industries accelerated to the fastest YoY pace of the current economic expansion. Even after stripping out volatile incentive-paid occupations, wages keep moving higher on a YoY basis. We also chart a couple of specific industries’ ECI wages and salaries numbers. While truckers are getting huge wage bumps, a big uptick in wage growth for the hospitality sector is working itself off.
Below we show a table summarizing ECI wages and salaries growth by occupation and industry. As shown, while wage growth is varied across the different occupations and industries, QoQ annualized growth is almost always stronger than YoY growth, itself stronger than 5 year annualized growth. While Q1 was a particularly strong quarter, and likely represents much stronger wage growth than the current trend or sustainable pace, it’s very clear that wage growth is accelerating broadly and is likely to continue doing so.