Newspaper article THE JOURNAL RECORD

Employment Costs Record Lowest Growth in Five Years

Newspaper article THE JOURNAL RECORD

Employment Costs Record Lowest Growth in Five Years

Article excerpt

WASHINGTON (AP) _ Americans' wages, salaries and benefits posted the smallest gain in five years in the 12 months ended Sept. 30, the government said Tuesday in one of two reports showing the weak economy was keeping a brake on inflation.

"The back of inflation has been broken," asserted Allan Sinai, an economist with the Boston Co.

Economist Robert G. Dederick of the Northern Trust Co. in Chicago concurred.

"There's still a residue," he said, "but basically we're talking about an economy in which inflation essentially is absent in goodsoducing areas and is only in limited proportions in serviceoducing areas."

The Labor Department said its Employment Cost Index, considered one of the best gauges of wage inflation pressures, slowed to a 3.5 percent advance in the year ended in September.

That was down from 4.3 percent a year earlier and the smallest increase since costs edged up 3.4 percent in the year ended in September 1987. The index had risen 3.6 percent in the year ended last June.

At the same time, the Commerce Department reported an inflation measure tied to the gross domestic product edged up at a 2.1 percent annual rate, the slowest advance since the department began calculating it in 1982.

As measured by the Labor Department's Consumer Price Index, inflation rose 3.1 percent in 1991, down from 6.1 percent a year earlier. It has risen at a 2.9 percent annual rate during the first nine months of this year, compared to a recent high of 13.3 percent in 1979.

Dederick said there is no likelihood of any imminent inflationary rebound, given the weak economic environment.

"The question is, is it going to drop farther?" he said.

Both the wage and salary and the benefit components helped brake the overall increase in the Employment Cost Index.

Wages and salaries rose just 2. …

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