Note in the highlights below the reference-years 1969, 2002, 2008 and 2009 and you get the fact that the Fed's latest moves are not in the least bit politically motivated.
The ECI's reading by the way is good news, as it confirms our present view that the economy remains in decent shape and that the current selloff in equities is a correction within an ongoing bull market. Of course our view is data-dependent and is, therefore, forever flexible:
The employment cost index, a broad gauge monitored by the Federal Reserve, increased 0.8 percent in the July-September period from the prior quarter, according to a Labor Department report Wednesday. That compared with the median estimate of economists for a 0.7 percent increase. The gauge was up 2.8 percent from a year earlier, matching the prior quarter as the fastest gain since 2008.
The data suggest demand for workers remains strong and companies are offering better compensation packages to workers amid the lowest unemployment rate since 1969, reinforcing the Fed’s outlook for gradual interest-rate hikes to keep the economy from overheating. The report also gives President Donald Trump and Republicans another positive economic talking point ahead of next week’s midterm elections.
The latest reading shows momentum in worker compensation ahead of October wage figures due in Friday’s monthly employment report.
Average hourly earnings, a separate monthly measure of private- sector wages that can be influenced by shifts in industry employment and hours worked, have been accelerating very gradually in this expansion. The annual increase is expected to surpass 3 percent in October’s figures, which would be the first gain at that pace since 2009.
Wednesday’s report showed private-sector wages and salaries rose 3.1 percent in the third quarter from a year earlier, the best pace since 2008. The 3.1 percent annual gain in education and health services was the biggest in a decade, and transportation and warehousing pay got a 4.3 percent boost over the past year, the most since the three months ending September 2002.