The recent downtrend in wages to start the New Year has sparked fear amongst economists of a financial slowdown. Fortunately, a greater understanding of how wages were reported during the most recent quarter showed that the declines weren’t as drastic as they initially appeared.

Economists initially found that wages had dropped by 0.3% this quarter, which was the biggest shock since the financial crisis of 2008. Additionally, a broader analysis of the data showed that wages had only fallen by 0.1%. It was found that the more drastic figure came from benchmark revisions and survey adjustments that occurred in the later stages of the quarter, making the 0.3% figure misleading.

As a result of this new data, economic policy experts are optimistic that there is no cause for concern right now. This conclusion is supported by the fact that wages have actually been rising since the latter half of 2019 and they only experienced a minor decrease in the beginning of 2020.

In conclusion, economists can breathe easy knowing that the recent downturn in wages reported in the beginning of 2020 was caused by benchmark revisions and survey adjustments, making the 0.3% decrease more of a bump in the road rather than the sign of an impending financial crisis. Despite the minor setback, wages have been steadily growing since the second half of 2019 which can provide assurance that the current economy is still viable.

You can read this full article at: https://www.housingwire.com/articles/wage-downtrend-should-ease-inflation-fears/(subscription required)

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