Former International Trade Commission Chief Peter Morici on the state of the U.S. job market.
U.S. workers saw the largest increase in wages and benefits since September 2008, according to a new report from the Labor Department on Tuesday.
The employment cost index, a gauge of total compensation for civilian workers, increased 0.6% in the second quarter. The cost of pay and benefits jumped 2.8% in the 12-month period ended in June, the highest yearly growth rate in nearly a decade.
Wages alone gained 2.8% over the past 12 months, which also reflected a near 10-year high.
Growth in benefits outpaced wages in the second quarter. Wages were up 0.5%. Benefits, which cover health care, retirement plans and other items, jumped 0.9%. That marks the fastest pace in four years. – READ MORE
[divider][/divider]The U.S. economy exploded in the second quarter of 2018, with the gross domestic product (GDP) climbing 4.1% — nearly doubling the first quarter, which was revised up to 2.2%.
The booming rate is the highest since the third quarter of 2014 and just the third-highest since the Great Recession began in 2008. The running four-quarter average is 3.1%, considered by economists to be a very strong number.
In Q2 of 2018, consumer spending grew 4%, while nonresidential business investment jumped 7.3%, both also considered strong numbers.
Wrote CNBC: Exports rose in part as farmers rushed to get soybeans to China ahead of expected retaliatory tariffs to take effect in the coming days. Declines in private inventory investment and residential fixed investment were the main drags, the report said.
The tariffs as well as last year’s massive tax cut both were key factors in the growth.
“Bottom line, if it wasn’t for a big upside to inflation, GDP would have been much better because of the upside in spending, boost in exports and government spending which offset an unexpected sharp decline in inventories and no change in gross private investment,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. – READ MORE
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