Wages and salaries in the second quarter rose almost double previous estimates

Wages and salaries in the second quarter rose almost double previous estimates, indicating the U.S. economy may have created more jobs.

Pay jumped by 97.4 billion U.S. dollars at an annual rate in the first quarter, compared with a previously reported 51.1 billion U.S. dollars of profit, revised figures for the Commerce Department showed today in Washington. The data reflect a more complete explanation of employment and income that was available to the Department of Labor in the tabulation of the monthly job.

"There was a bit more employment of the monthly payroll survey certainly suggested," said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut, in an interview. While bonus payments may have been responsible for similar reviews in previous years, reflecting the financial industry "boom", and the improvement is likely to lead to greater gains in total employment, "said Stanley.

Today's Commerce Department report also showed a bigger increase in the neighborhood of recent consumer spending than previously estimated, and the savings were also reviewed, showing how the income gains are helping families repair tattered finances. Hewlett-Packard Co. is one of the companies say they are planning to boost pay, while Citigroup Inc. is among those who say that adding more workers.

need for households to rebuild savings "is longer than we thought it was," said Stanley. "I see healthy consumer spending next year than this year."

Raise wages

Wages increased by another 51.4 billion U.S. dollars between July and September, culminating a 2.8 percent gain in the last four quarters and the best record of the year-on annual performance since mid-2008. Consumer spending, which accounts for about 70 percent of the economy, rose at a rate of 2.8 percent annually, the most in almost four years, today's report showed.

The savings rate, or proportion of household disposable income were able to middle distance, rose to 6.2 percent in the second quarter and was 5.8 percent in the period July to September, today's report showed. The data was revised upward from previous estimates of 5.9 percent and 5.5 percent respectively.

"We are building a good track for 2011," said Joseph LaVorgna, chief economist at Deutsche Bank Securities Inc. in New York, in an interview. "Corporate profits have been pointing to a stronger labor market than we've seen at this time. Over time we will have some strong numbers."

Earnings rose 2.8 percent last quarter from the previous three months, and have been doing every quarter since the first three months of 2009, the Commerce Department today showed.

Christmas Shopping

Retailers are planning a Christmas shopping period are driving better and discounts to attract more consumers to the stores. The National Retail Federation has forecast sales for November and December holiday will increase by 2.3 percent from a year ago, the most since 2006.

HP, the world's largest maker of computers, yesterday's earnings forecast for the period ending in January that topped analysts' forecasts as companies replace aging PCs and other equipment. The firm raises salaries restore the fiscal year, the chief executive Leo Apotheker said.

Employers added 151,000 workers to their payrolls in October, the first gain in five months, the Labor Department reported this month. Measures of hours worked and wages also increased. The government will release its November report next week.

Census Subdivision

Today, reviews of income derived from a quarterly census of employment and wages based on tax records covering almost all employers, making them the most accurate representation of what is happening in the labor market. The monthly payroll numbers are based on a survey of about 140,000 companies covering 410,000 workplaces, covering approximately one third of the total payroll.

Not all economists were optimistic about increasing revenue. With companies unable to raise prices and the families who still need to repair their balance sheets, companies want to control their expenses and limit hiring, said Joshua Shapiro, chief U.S. economist MFR Inc. in New York.

"Companies will do everything possible to minimize increases in labor costs," said Shapiro.