"The Employment Cost Index shows continued deceleration in compensation growth in Q4."

[mahatmakanejeeves]

Reposted by Erika McEntarfer
https://bsky.app/profile/erikamcentarfer.bsky.social

Julia Coronado
‪@jc-econ.bsky.social‬

The Employment Cost Index shows continued deceleration in compensation growth in Q4. All metrics of wage growth are slowing even as inflation has gotten stuck confirming that labor demand < greatly reduced labor supply


8:58 AM · Feb 10, 2026

The Employment Cost Index shows continued deceleration in compensation growth in Q4. All metrics of wage growth are slowing even as inflation has gotten stuck confirming that labor demand < greatly reduced labor supply

— Julia Coronado (@jc-econ.bsky.social) 2026-02-10T13:58:07.711Z

[jmbar2]

1. I just learned the term "wage reset" today...

...where the "invisible hands" somehow all decide at the same time to lower wages across the board.

People sitting around a conference table, deciding to reduce wages to below the cost of living for their employees, then facing them every day. While companies are making record profits.

How can SO many people think this is OK?

[progree]

2. Employment Cost index - considred the best statistic on wages/salaries and benefits, and the Federal Reserve's favorite

source on the same.

Here is the link to the latest BLS report: https://www.bls.gov/eci/

Some context:

The ECI shows changes in wages and benefits in a manner that fixes the composition of the workforce. This is important, particularly when there are large changes in employment, because these data are not subject to the same distortions as the monthly average hourly earnings series, which can artificially be increased when low-wage workers lose their jobs and drop out of the sample (as happened in 2020) or artificially be decreased when these same workers are hired back (as happened in 2021) [1].

By fixing workforce composition, the ECI provides a more accurate picture of what is actually happening to wages.

[1] The Pandemic’s Effect on Measured Wage Growth, The WHite House, 4/19/21 ((Biden era))
. . . Original link now gone, thanks to Krasnov: https://www.whitehouse.gov/cea/written-materials/2021/04/19/the-pandemics-effect-on-measured-wage-growth/
. . . The Archive.org link: https://web.archive.org/web/20220208080743/https://www.whitehouse.gov/cea/written-materials/2021/04/19/the-pandemics-effect-on-measured-wage-growth/