Employment Growth Less Than Expected

The Employment Situation Summary for April 2006 reports that employment per the payroll survey rose by 138,000. The household survey shows an increase of only 47,000. I wish I had better new for this Cinco de Mayo.

I also want to know what the heck CNN means by this:

But the report had one reading that might be of concern to the Fed – average wages rose more than expected. The average hourly wage was up 9 cents, or 0.5 percent, to $16.61. Economists had forecast only a 0.3 percent rise after.

I guess these folks can’t stand the possibility that real wages might one day recover.

Update: Kevin Drum reads the Washington Post also getting alarmed that real compensation might have increased. The WaPo’s evidence?

But the slack that typified the nation’s labor market from 2001 until last year appears to have dissipated, and wages are starting to rise. This tightening in the labor market was underscored yesterday by new government data. For most of the past five years, workers’ productivity has risen faster than their compensation. But in the first quarter, the value of pay and benefits for workers rose at a 3.6 percent inflation-adjusted annual pace, as their productivity rose only 3.2 percent.

Later in this story, we read:

Wages for nonsupervisory workers rose 3.4 percent in the year ended in March, notes Economic Policy Institute Senior Economist Jared Bernstein. That’s less than consumer prices rose over that period, but mainly because of the sharp increase in energy prices in that span. In the year ended in March 2004, wages rose only 2.6 percent.

Average hourly earnings of production or nonsupervisory workers on private nonfarm payrolls in 1982$ was $8.30 as of July 2003 but was only $8.19 as of March 2006.

But back to Kevin:

Even the slightest indication that workers might be gaining back some of the losses of the past five years is enough to send America’s economic elite into a tizzy. It’s funny that a 30% increase in CEO pay doesn’t seem to have the same effect, though, isn’t it?

Update II: Dean Baker notes the divergent signals on whether real compensation is rising or falling:

Last Friday, the Bureau of Labor Statistics (BLS) released the employment cost index (ECI) which showed a sharp slowing in the rate of nominal hourly compensation growth in the first quarter to an annual rate of just 2.4 percent. This is well below the rate of inflation, which, depending on the course of gas prices, will be in the range of 3.0-4.0 percent for this year. On Thursday, BLS released productivity data, which showed that hourly compensation was rising at an annual rate of 5.7 percent for the same quarter. Further complicating the picture is the employment report that BLS released this morning showing wages rising at a 4.7 percent annual rate over the most recent three months (compared to the prior 3-month average).

Dean tries to explain what is going on with this data with the basic message being that while the growth in benefits has slowed, wage growth has accelerated.