MONETARY POLICY REPORT: FEBRUARY 2019 9 o employers of providing benefits, increased 6. Measures of change in hourly compensation 3 percent over the same period, while average Percent change from year earlier hourly earnings-which do not take account of benefits-increased 3 2 percent over the Compensation per hour Atlanta Fed's 12 months ending in January of this year; the Wage Growth Tracker annual increases in both of these measures were the strongest in nearly 10 years. The measure of wage growth computed by the Federal Reserve bank of Atlanta that tracks median 12-month wage growth of individual reporting to the Current Population Survey showed an increase of 3. 7 percent in January, Average hourly earnings. near the upper end of its readings in the past 200320052007200920112013201520172019 three years and well above the average increase in the preceding few years. and have likely been restrained by slow growth of labor productivity over Changes. the daeg n s warcat 2037.m for the An much of the expansion SouRcE: Bureau of Labor Statistics via Haver Analytics: Federal Reserve Bank of Atlanta, Wage Growth Tracker. These moderate rates of compensation gains likely reflect the offsetting influences of a strong labor market and productivity 7. Change in business-sector output per hour growth that has been weak through much Percent annual rate of the expansion. From 2008 to 2017, labor productivity increased a little more than I percent per year, on average, well below the average pace from 1996 to 2007 of nearly 3 percent and also below the average gain in the 1974-95 period (figure 7). Although considerable debate remains about the reasons for the slowdown over this period the weakness in productivity growth may be partly attributable to the sharp pullback in capital investment during the most recent recession 1948-1974-1996-200 2008-2018 and the relatively slow recovery that followed More recently, however, labor productivity is estimated to have increased almost 2 percent dm8:p图 at an annual rate in the first three quarters of 2018-still moderate relative to earlier periods, but its fastest three-quarter gain since 2010 While it is uncertain whether this faster rate of growth will persist, a sustained pickup in productivity growth, as well as additional labor market strengthening, would likely support stronger gains in labor compensation 5. The Atlanta Fed,s measure differs from others in that it measures the wage growth only of workers who were employed both in the current survey month and 12 months earlieMONETARy POLICy REPORT: FEBRUARy 2019 9 to employers of providing benefits, increased 3 percent over the same period, while average hourly earnings—which do not take account of benefits—increased 3.2 percent over the 12 months ending in January of this year; the annual increases in both of these measures were the strongest in nearly 10 years. The measure of wage growth computed by the Federal Reserve Bank of Atlanta that tracks median 12-month wage growth of individuals reporting to the Current Population Survey showed an increase of 3.7 percent in January, near the upper end of its readings in the past three years and well above the average increase in the preceding few years.5 . . . and have likely been restrained by slow growth of labor productivity over much of the expansion These moderate rates of compensation gains likely reflect the offsetting influences of a strong labor market and productivity growth that has been weak through much of the expansion. From 2008 to 2017, labor productivity increased a little more than 1 percent per year, on average, well below the average pace from 1996 to 2007 of nearly 3 percent and also below the average gain in the 1974–95 period (figure 7). Although considerable debate remains about the reasons for the slowdown over this period, the weakness in productivity growth may be partly attributable to the sharp pullback in capital investment during the most recent recession and the relatively slow recovery that followed. More recently, however, labor productivity is estimated to have increased almost 2 percent at an annual rate in the first three quarters of 2018—still moderate relative to earlier periods, but its fastest three-quarter gain since 2010. While it is uncertain whether this faster rate of growth will persist, a sustained pickup in productivity growth, as well as additional labor market strengthening, would likely support stronger gains in labor compensation. 5. The Atlanta Fed’s measure differs from others in that it measures the wage growth only of workers who were employed both in the current survey month and 12 months earlier