But all the clever talking heads (the same ones that to-a-man saw rising rates this year) keep telling us that wage inflation is coming any minute, it has to right, and will create escape velocity and nirvana on American soil. Sorry, nope. Unit labor costs dropped 1.0% in Q3 against a 0.3% preliminary print and expectations of a mere 0.2% drop (the 4th missing quarter of th elast 5 and lowest growth since Q4 2013. What is more problematic is real hourly compensation was revised drastically lower - quite a plunge.
Unit Labor costs dropped for the 2nd quarter in a row...missing for the 4th quarter of the last 5...
This is how the BLS just "revised" everyone wages on paper to match what is going on in reality:
In the third quarter of 2014, nonfarm business productivity increased 2.3 percent, rather than 2.0 percent as reported November 6. The revised figure reflects an upward revision to output that was partially offset by a small upward revision to hours. Unit labor costs were revised down, and decreased 1.0 percent rather than increasing 0.3 percent, reflecting both the upward revision to productivity and a 1.0 percentage point downward revision to hourly compensation growth.
In the second quarter of 2014, nonfarm business productivity, output, and hours were unrevised. Unit labor costs fell 3.7 percent, rather than 0.5 percent as previously reported, the result of a large downward revision to hourly compensation.
Which leads us to the all important Real Hourly Compensation, most likley the only metric which Yellen looks at now considering unemployment data has become a complete farce, is was revised drastically lower as a result a negative(!) revision to Business and Durable Manufacturing hourly earnings which were down to -0.5% and -0.3%, from 0.5% and 0.7%, respectively.
[5]
... busting the myth of wage inflation induced rate hikes and "self-fulfilling escape velocity growth any second" now meme.
