WASHINGTON (12/22/15)--While the economy has seen payrolls expand at a steady clip in recent months, upward pressure on wage growth has remained largely elusive.
But that trend might be shifting, as the Bureau of Economic Analysis reported this week that personal income climbed 1.3% in the third quarter, and that the gains were propelled by net earnings, which include wage and salary income.
“Personal income sustained its 1.3% growth rate during the third quarter, corroborating the modest upward pressure on incomes seen in the recent Bureau of Labor Statistics data,” said Adam Kamins, Moody’s analyst (Economy.com Dec. 21). “Perhaps just as interesting as the third quarter figure, however, is the fact that upward revisions for the second quarter paint spring income growth in a far more favorable light.”
The Plains states recorded the highest increase in income at 1.6%, led by South Dakota, Nebraska, Iowa and Kansas, which received a boost from farm earnings.
The Southwest, meanwhile, reported the weakest gains. And Texas, Oklahoma and New Mexico have seen income growth fall short of the national average, according to Moody’s.
By industry, farming, retail and finance saw the most significant increases in income growth, and only mining failed to record at least some gains in income.
“Wage growth may finally be starting to pick up in a manner befitting the recent pace of job gains,” Kamins said. “With finance and construction among the largest contributors to third quarter income gains, the pickup in net hiring in high- and mid-wage industries seen in the jobs numbers appears to be translating to incomes.”