Overall wages and benefits grew by a mere 0.4 percent in the second quarter, the Bureau of Labor Statistics reports. True, it's not a negative number, as we saw with gross domestic product this morning. But that 0.4 percent is unsettling.
It comes as the final number in a year when compensation costs for private industry workers grew by 1.5 percent over the year before. BLS says it's the smallest change in the Employment Cost Index since it began in 1980.
Wages and salaries grew by just 1. 8 percent for the year ending June 2009, compared to 3.1 percent for the year ending June 2008. That means wage gains have been cut in half, and many people are taking home less. "As long as this lasts it is very hard to see
anything but downward pressure on core inflation," writes economist Ian Shepherdson.