Christopher Rugaber at the Associated Press and the "expert" he quoted in his writeup on the government's awful Employment Cost Index report seemed to be taking their cues from Steven Wright's deadpan comedy act. The problem, of course, is that they were writing and saying isn't funny at all.
Rugaber, with his "expert" help, assembled an impressive array of understatements and misstatements in the wake of the smallest reported quarterly increase in U.S. worker pay on record. His worst characterization: "[T]he job market is not yet back to full health."
Rugaber led off acceptably with the basic facts (bolds are mine):
US PAYCHECKS GROW AT RECORD-SLOW PACE IN 2ND QUARTER
U.S. wages and benefits grew in the spring at the slowest pace in 33 years, stark evidence that stronger hiring isn't lifting paychecks much for most Americans. The slowdown also likely reflects a sharp drop-off in bonus and incentive pay for some workers.
The employment cost index rose just 0.2 percent in the April-June quarter after a 0.7 increase in the first quarter, the Labor Department said Friday. The index tracks wages, salaries and benefits. Wages and salaries alone also rose 0.2 percent.
Both measures recorded the smallest quarterly gains since the second quarter of 1982.
Salaries and benefits for private sector workers were unchanged, the weakest showing since the government began tracking the data in 1980.
Fine so far. Now it's time to look at the understatements and misstatements, starting here:
The disappointing figures come after the index had been pointing to a pickup in wage growth after nearly two years of steady hiring.
As seen below, Rugaber has been pretending that levels seen during the recession in 2008 were "pointing to a pickup":
Six years after the recession's official end, the fact is that quarterly compensation growth has usually been miles below what was seen during almost every quarter during the earlier years of this century. The 0.7 percent Rugaber cited as "pointing to a pickup" in the first quarter was met or exceeded in 30 of 31 quarters from the beginning of 2001 through the third quarter of 2008.
The slowdown suggests that companies are still able to find the workers they need without boosting pay, a sign the job market is not yet back to full health.
"Full health"? That a real howler.
For heaven's sake, the job market isn't anywhere near "full health." To cite just one drop-dead obvious statistic, full-time employment is still below the peak seen nearly eight years ago. Additionally, full-time employment that has been restored more than likely has a higher component of temporary service workers, since that metric is at an all-time high. These folks are considered "full-time" if they are working 35 or more hours per week, but they clearly don't have the job security that the term "full-time employee" normally implies.
"Despite a tighter labor market, and all of the stories about pay increases at various large firms, wage growth is not picking up meaningfully," said Jennifer Lee.
An if you're in the private sector, i.e., the part of the economy that adds genuine economic value, they aren't picking it up at all, as Rugaber noted earlier. In other words, all employee compensation increases occurred in the nonvalue-producing public sector. It must be nice to work on the taxpayer's dime.
Employers have added nearly 3 million jobs in the past year, lowering the unemployment rate to 5.3 percent in June, down from 6.1 percent 12 months earlier. Most economists have expected those gains to force businesses to raise pay to attract and keep employees.
Maybe it will someday occur to the press that the unemployment rate is being cooked. Readers should know that the people who conduct the surveys and submit the data which goes into the monthly jobs report do not believe, based on the information they collect and submit, that the official unemployment rate is anywhere near as low as the official rate of 5.3 percent. There's also that annoying 93 million "not in labor force" statistic. Many of these people are retired and not looking for work, but tens of millions would like to be working, and aren't. These tens of millions of people are why businesses don't have to "raise pay to attract and keep employees."
The employment cost index figures now match the sluggish pace of growth reported in the average hourly pay data that's part of the monthly jobs report.
In other words, Chris, what everyone wants us to believe was unexpected really should have been entirely expected.
Cross-posted at BizzyBlog.com.
