Increases in wages stir concern

NEW YORK – Here’s the rare piece of economic data you might check by looking in your wallet: Workers who don’t work on a farm and aren’t supervisors are making, on average, $22.69 more a week than they did last year, according to the Labor Department.

That raise is making some investors twitchy.

Year-over-year increases in average wages are the steepest since the summer of 2001. After 17 quarters of double-digit growth in corporate profits while wages stayed flat, average workers may get a scrap of economic expansion. That’s the good news.

The bad news is that wage increases could push prices higher. Economists such as Bear Stearns John Ryding worry that “tightness in the labor market and the rate of increase in average hourly earnings should continue to cause concern at the Fed about upside risks to inflation.”

Wage and salary costs of non-financial corporations were up 9.7 percent from a year ago, according to the gross domestic product report released Wednesday. That’s the biggest increase since the fourth quarter of 1984.

But some economists think American workers are long overdue for a raise. Higher benefits costs have increased total compensation costs without passing anything extra on to workers, they say.