Slow and Steady Compensation GrowthCompensation, as measured by the employment cost index, edged down to 0.5% in the second quarter. Year-ago growth rose to 1.9%, up for two consecutive quarters after posting its slowest rate at the end of 2009 over the 25-year history of the series. The high-wage growth of late 2007 and early 2008 that sparked concerns about inflation is long gone, and the current slow growth is likely to persist over the medium term. Persistent declines are unlikely, but a sustainable uptick in growth will not occur until late 2010. Deflation, which had been a concern earlier in 2009, is not likely to appear, as the Federal Reserve has acted aggressively to promote stability. Instead, the current environment of low inflation will remain the theme in the near term, as workers face slow wage growth....
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