Workers' wages and benefits grow by O.7%

Economic Growth Not Going To Workers

The 0.7 percent increase in compensation was the smallest since the fourth quarter of 2002 and was slightly weaker than the 0.9 percent rise that economists were forecasting.

Wages and salaries went up by 0.5 percent in the final quarter of 2003. That marked the smallest increase since the fourth quarter of 2002 – and represented a slowing from the 0.7 percent increase in wages and salaries registered in the third quarter.

The moderation in compensation came as economists believe the economy slowed in the fourth quarter after growing at a blistering 8.2 percent rate in the third quarter – the strongest performance in nearly two decades. Analysts predict economic growth in the final quarter of 2003 clocked in at a rate of 4 percent to 5 percent, a still healthy pace. The government on Friday will provide its first estimate of economic growth in the fourth quarter.

In a second report from the department, new claims for unemployment benefits last week dipped by a seasonally adjusted 1,000 to 342,000, the lowest level since the end of December, a sign that the pace of layoffs is stabilizing. Claims hit a high last year of 459,000 in the middle of April. Since then, they have slowly drifted downward.