The Donald Trump economy is still blowing away the disastrous Obama economy, and this time economists are reporting that worker pay rate has hit its highest point for a decade.
In fact, pay rates have finally been restored to the same place they were when Obama took office in 2008. It took Obama eight years to destroy our economy, but it has taken President Trump less than two years to bring it roaring back.
According to CNBC:
- The employment cost index rose 2.8 percent for the second quarter, the biggest increase since the third quarter of 2008.
- Wage growth has been the missing component of the economic recovery, though the ECI has been steadily rising over the past year and a half.
- The Federal Reserve meets this week and is unlikely to increase interest rates, though the rise in compensation will factor into discussions.
Compensation for workers rose to a nearly 10-year high in the second quarter as inflation pressures continued to percolate in the U.S. economy.
The employment cost index increased 0.6 percent for civilian workers in the three-month period ending in June, according to a Bureau of Labor Statistics release Tuesday. That brought the 12-month rate up to 2.8 percent, the highest level since 2.9 percent in the third quarter of 2008, amid the financial crisis and the Great Recession.
Significant wage gains have been a missing part of the economic recovery, with average hourly earnings increases barely keeping pace with inflation.
The particulars are as follows:
The index draws from a sample of 27,200 observations of some 6,600 private businesses as well as 8,000 observations from 1,400 government offices.
Wages and salaries rose 0.5 percent for the quarter and 2.8 percent for the 12-month period, while benefits costs increased 0.9 percent and 2.9 percent, respectively.
Private industry compensation was up 2.9 percent, a substantial rise from the 2.4 percent recorded as of June 2017. Government compensation increased 2.3 percent for the period, which actually was a pullback from the 2.6 percent gain recorded in June 2017.
Industry-wise, sales and related jobs recorded a 3.5 percent gain while transportation and material moving rose 3.4 percent. Hospital work showed the smallest gain at 2.2 percent.
The good news on wages comes on the tail of news that Trump grew the economy at a 4.1 percent rate, far exceeding anything Obama ever achieved in all his eight years in office.
Last week Trump touted the economy saying, “We’re on track to hit the highest annual average growth rate in 13 years.”
“We’ve accomplished an economic turnaround of historic proportions,” the president added.
Are you tired of winning yet, America?
Follow Warner Todd Huston on Twitter @warnerthuston.