[Texgreen] Economy grew faster than thought; wages soar!

[Roger Baker]

"Joshua Shapiro, the chief United States economist at MFR, said that =20
much of the income increase likely went to people who work on Wall =20
Street or for hedge funds. The biggest spike was in the first =20
quarter, when financial companies typically pay bonuses"

And once these hedge fund bonuses have a chance to trickle down a =20
bit, the rest of us will probably feel richer too.

  -- Roger

                       =20
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<http://www.nytimes.com/2006/08/30/business/31econcnd.html?=20
hp&ex=3D1156996800&en=3D3cb6de5794692dac&ei=3D5094&partner=3Dhomepage>

... Perhaps the biggest surprise in today=92s report was a surge in =20
wage-and-salary income during the first half of this year. Between =20
the fourth quarter of last year and the second quarter of 2006, it =20
grew at an annual rate of about 7 percent, after adjusting for =20
inflation, up from an earlier estimate of 4 percent, according to =20
MFR, a consulting firm in New York.

As a result, wages and salaries no longer make up their smallest =20
share of the gross domestic product since World War II. They =20
accounted for 46.1 percent of economic output in the second quarter, =20
down from a high of 53.6 percent in 1970 but up from 45.4 percent =20
last year.

Total compensation =97 including employee health benefits, which have =20=

risen in value in recent years =97 equaled 57.1 percent of the economy, =20=

down from 59.8 percent in 1970. Still, compensation makes up a larger =20=

share of the economy than it did throughout the 1950=92s and early =20
60=92s, as well as during parts of the mid-1990=92s and the last couple =20=

of years.

Economists said the income jump offered reason to worry somewhat less =20=

about the recent slowdown turning into something more dangerous, =20
since households may have more money to spend than earlier estimated. =20=

But it also raised the possibility that inflation could pick up again =20=

later this year.

Joshua Shapiro, the chief United States economist at MFR, said that =20
much of the income increase likely went to people who work on Wall =20
Street or for hedge funds. The biggest spike was in the first =20
quarter, when financial companies typically pay bonuses, and other =20
data =97 including Labor Department numbers on wage growth and private-=20=

sector surveys on consumer confidence =97 suggest that most families =20
are not receiving pay increases that outpace inflation.

=93If this were more widely spread around, we would be seeing it in =20
reading on confidence and sentiment,=94 Mr. Shapiro said. =93It tends to =
=20
indicate this is pretty concentrated on the upper end.=94...=