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VOL. 128 | NO. 85 | Wednesday, May 01, 2013

US Employment Compensation Up 0.3 Percent in First Quarter

MARTIN CRUTSINGER | AP Economics Writer

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WASHINGTON (AP) – Americans' wages increased at a faster rate from January through March than the previous quarter, a trend that helped boost consumer spending at the start of the year. But their benefits barely grew.

The Labor Department said Tuesday that an index that measures wages and benefits rose 0.3 percent during the first quarter. That's down from a 0.4 percent gain in the October-December quarter and the smallest gain in a year.

Wages and salaries rose 0.5 percent, up from the 0.3 percent gain in the previous quarter. But benefits, which include health insurance and pension contributions, rose just 0.1 percent after a 0.6 percent rise in the fourth quarter.

Higher pay has helped consumers shake off an increase in Social Security taxes. Consumer spending rose in the first quarter at the fastest pace in more than two years.

But economists said wages must grow even faster to sustain the first-quarter gains in consumer spending.

For the 12 months ending in March, wages and salaries are up just 1.6 percent, slightly lower than the 1.7 percent rise in the 12 months ending in December. That means that wages have barely kept up with inflation.

"We are seeing very weak wage growth," said Gregory Daco, a senior U.S. economist at Global Insight.

Wages account for about 70 percent of compensation costs. Benefits account for the other 30 percent.

The Labor Department said that it had discovered an error in the benefits data for a private industry sales and office staff covering the current report and the two previous reports. Labor Department analysts said the error should make only a small difference in the overall benefits number.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 70 224 13,880
MORTGAGES 105 298 18,124
FORECLOSURE NOTICES 16 55 3,560
BUILDING PERMITS 0 430 32,733
BANKRUPTCIES 81 211 13,214
BUSINESS LICENSES 23 68 4,773
UTILITY CONNECTIONS 103 307 20,206
MARRIAGE LICENSES 39 72 4,269

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