Tighter labor market appears to be leading to better pay for workers making the least
Average hourly earnings have been stuck near a 2.5% annual increase for most of the past year and a half. But the jobs report shows stronger wage growth in the lowest-paying broad sector tracked, hospitality.
3--Why Small Firms Are Giving Out 15% Pay Raises-- Wage growth is approaching that of bigger companies, in part to keep poaching at bay
Wage growth for existing employees accelerated by 1.07% annually over the past three years at companies with fewer than 50 employees, according to an analysis of ADP data by Moody’s Analytics for The Wall Street Journal—well above the 0.69% average increase for firms of all sizes over the same period.
Small businesses are feeling the pressure, Mark Zandi, chief economist of Moody’s Analytics, said. “They have to work harder to keep employees now that the labor market is tight.”
There were 5.7 million job openings in May, the latest month for which data were available, according to the U.S. Bureau of Labor Statistics....
According to a June survey of roughly 800 companies by the Journal and Vistage Worldwide Inc., 58% of small-business owners reported increased difficulties finding needed workers. Many have responded by boosting pay or benefits, while others have stepped up training or slowed the pace of growth.
Craig Zoberis, president of Fusion OEM, a contract manufacturer outside Chicago, has raised hourly pay for entry-level workers by $1 for each of the past three years. Over the past two years, he has also stepped up efforts to reward the best employees on his production floor, who can now see their pay jump by as much as 73% over a four-year period.
“With the competition going on for top employees, we had to meet and exceed what the marketplace is looking for,” he said.
4--U.S. Economy Glides Back to Steady, Modest Growth Path-- Economy enters ninth year of expansion, growing at a 2.6% annual rate in the second quarter
The U.S. entered the ninth year of economic expansion in steady but unspectacular fashion that shows little sign of abating.
Gross domestic product, a broad measure of goods and services produced in the U.S., expanded at a 2.6% annual rate in the second quarter, the Commerce Department said Friday, a rebound after a tepid start to the year.
The figures repeated a familiar pattern of weak winters followed by a stronger spring and summer, leaving overall growth subdued. “The economy is on cruise control. Unfortunately cruise control is about 2%,” said Diane Swonk, founder of DS Economics.
The U.S. emerged from recession in mid-2009. Since then, GDP growth has averaged 2.1%. In contrast, growth averaged 3.6% during a 10-year span in the 1990s and 4.9% during a nearly nine-year stretch in the 1960s, the only two expansions with longer durations...
In the 1960s, for example, runaway inflation led the Federal Reserve to raise interest rates and curtail growth. Today, broad measures of inflation are historically weak. The price index for personal-consumption expenditures—the Fed’s preferred inflation gauge—rose at an annual rate of 0.3% in the second quarter. That is well below the Fed’s 2% target. Core prices, which exclude volatile food and energy costs, increased 0.9% at an annual rate during the quarter. ....
Against that backdrop, stocks and corporate profits are marching higher and volatility in markets is low. The Dow Jones Industrial Average is less than 200 points shy of the 22000 mark after rising 0.15% Friday 21830.31.
On Friday, the biggest U.S. energy companies reported robust profits. Exxon Mobil Corp. nearly doubled its net income compared with a year ago and Chevron Corp. saw profits jump to $1.45 billion in the second quarter. Earlier in the week, Caterpillar Inc., the world’s largest heavy-machinery maker, delivered an upbeat earnings report amid growing demand in China’s construction sector and a revitalization of the mining industry...
Businesses also have been upbeat. A measure of corporate spending, nonresidential fixed investment, climbed at a 5.2% pace. While that was down from the previous quarter, it is still one of the best readings since 2014. Investment in equipment was even stronger; it grew at 8.2% pace
Nation’s GDP has dropped by more than half this decade; ‘a pretty nightmarish’ situation
The fabric of society has been destroyed,” said Jihad Yazigi, Beirut-based editor of an economic trade publication, The Syria Report....