Wages/Home prices/Mfr'g/Consumer confidence, all in one short note

The Q3 Employment Cost Index was up 1.1% q/o/q for total compensation, about in line with the 1% expected gain. The y/o/y rise was 4.3% which also was the private sector read for total comp. Wages and salaries for the private sector were higher by 4.5% y/o/y vs 4.6% in Q2 and vs 5.1% in the two prior quarter. Part of the moderation is lapping tougher comparisons from last year.

Bottom line, while wage gains have clearly plateaued and on a rate of change basis are moderating, the pace is still very good in nominal dollars and finally getting positive in REAL dollars. Also, for perspective private sector wages/salaries in this ECI were up on average 2.5% per annum vs the 4.5% pace seen in Q3. Labor has more leverage and more say and while the recent union deals were more catch up to the lost real wages they experienced over the past few years, that shift in leverage was on full display.