WASHINGTON— Private sector wage growth in the first quarter was 5.1%, the same as the fourth quarter of 2022, according to the new Employment Cost Index released by the Bureau of Labor Statistics.
Total compensation growth – which includes benefits and wages – was 4.8%, a 0.3% drop from last quarter, the data show.
In addition, the Bureau of Economic Analysis reported real disposable income grew 0.3% in March, compared with 0.2% in February. The personal saving rate rose in March to 5.1% of disposable income, the highest level in over a year.
In addition, the BLS said real consumer spending was flat in March and core inflation rose 0.3%, which was the same level as February.
Fed Set to Meet
All of that information is coming as the Federal Open Market Committee (FOMC) prepares to kick off its May meeting today at which it is widely expected to raise rates again before adjourning on Wednesday.
“Wage growth is moderating only gradually and remains elevated. However, spending slowed over the course of the first quarter which should serve to restrain inflation,” said NAFCU Vice President of Research and Chief Economist Curt Long. “The FOMC is likely to raise rates once more this week, but at present there is not a compelling reason why rates should increase beyond May.”
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