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Wages make only modest advances

WASHINGTON — U.S. paychecks increased moderately in the final three months of last year, yet the gain was little changed from the sluggish post-recession trend.

The employment cost index, which tracks wages and benefits, rose 0.6 percent in the October-December quarter, the Labor Department said. That’s the same as the previous three months.

In the past year, salaries and benefits have risen just 2 percent, the same annual pace as the previous two quarters. That is below the roughly 3.5 percent rate that is consistent with a healthy economy.

There have been some signs wages are picking up in other data, but those gains are modest. Average hourly pay increased 2.5 percent in December from a year earlier, according to the government’s monthly jobs report. That was only the second time since 2009 that increases have reached that level, but it’s not far from the sluggish 2 percent pace that has existed since the recession.

Still, the modest annual gain in the employment cost index suggests that companies are able to find the workers they need without offering much higher pay.

That suggests there still may be millions of Americans who are unemployed or underemployed but are not reflected in the official unemployment rate.

For example, the number of people with part-time jobs but who would prefer full-time work remains higher than prerecession levels.

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