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Higher Wage Growth Likely This Year, WTI Signals

Arlington, Va. (March 18, 2014) — Workers likely will see higher wage increases overall in private industry later this year, according to the revised first-quarter Wage Trend Indicator™ (WTI) released today by Bloomberg BNA, a leading publisher of specialized news and information.

The index rose for the second consecutive quarter to 98.92 (second quarter 1976 = 100) from 98.77 in the fourth quarter of 2013.
“All labor market indicators are giving green lights right now, although employment growth has been fairly weak,” economist Kathryn Kobe, a consultant who maintains and helped develop Bloomberg BNA’s WTI database, said. “The WTI is forecasting that we’re going to see modest upward pressure on wages later in the year.” she said.
Kobe said she expects year-over-year wage growth in the private sector to rise slightly above 2.1 percent later in 2014. That was the gain recently reported by the Labor Department for 2013, according to the employment cost index (ECI). The WTI forecasts whether the rate of wage growth is accelerating or decelerating, but not the amount of the change.
Over its history, the WTI has predicted a turning point in wage trends six to nine months before the trends are apparent in the ECI. A sustained increase in the WTI forecasts greater pressure to raise private sector wages, while a sustained decline is predictive of a deceleration in the rate of wage increases.
Reflecting recent economic conditions, five of the WTI’s seven components made positive contributions to the revised first-quarter reading, while one factor was negative and another was neutral.

Contributions of Components
Among the WTI’s seven components, the five positive contributors to the revised first-quarter reading were the unemployment rate and job losers as a share of the labor force, both measured by DOL; forecasters’ expectations for the rate of inflation, compiled by the Federal Reserve Bank of Philadelphia; and the shares of employers planning to hire production and service workers in the coming months and reporting difficulty in filling professional and technical jobs, both taken from Bloomberg BNA’s quarterly employment outlook survey. The negative factor was industrial production, reported by the Federal Reserve Board. The neutral component was average hourly earnings of production and nonsupervisory workers, from DOL.
Bloomberg BNA's Wage Trend Indicator™ is designed to serve as a yardstick for employers, analysts, and policymakers to identify turning points in private sector wage patterns. It also provides timely information for business and human resource analysts and executives as they plan for year-to-year changes in compensation costs.
The WTI is released in 12 monthly reports per year showing the preliminary, revised, and final readings for each quarter, based on newly emerging economic data.
More information on the Wage Trend Indicator is available on Bloomberg BNA's WTI home page at

The next report of the Wage Trend Indicator™ will be released on
Thursday, April 17, 2014 (final first quarter)

Press Contact:
Conrad Heibel

Kathryn Kobe

Bloomberg BNA, a wholly owned subsidiary of Bloomberg, is a leading source of legal, regulatory, and business information for professionals. Its network of more than 2,500 reporters, correspondents, and leading practitioners delivers expert analysis, news, practice tools, and guidance — the information that matters most to professionals.  Bloomberg BNA’s authoritative coverage spans the full range of legal practice areas, including tax & accounting, labor & employment, intellectual property, banking & securities, employee benefits, health care, privacy & data security, human resources, and environment, health & safety.
Dr. Joel Popkin, who is acknowledged as one of the country's foremost authorities on the measurement and analysis of wages and prices, developed the WTI for Bloomberg BNA. Formerly an official with the Bureau of Labor Statistics, Dr. Popkin has been an analyst observing and predicting the U.S. economic outlook for 40 years. Kathryn Kobe, who worked with Popkin in designing the indicator for Bloomberg BNA, is director of price, wage, and productivity analysis at Economic Consulting Services LLC.

To obtain Wage Trend Indicator™ reports by e-mail on a regular basis, contact Research & Custom Solutions, Bloomberg BNA, 800-372-1033,