Posted on October 4, 2020
I have just a paragraph and a chart about this past Friday’s release by the Bureau of Labor Statistics (BLS) about the September employment situation. Economywide wages and salaries in the private sector continued to improve in September, but they still have a long ways to go to get back to prepandemic levels of wage growth. Wages and salaries were 1.7 percent below year-ago levels in September, after being down by almost 9 percent at the worst of the downturn in April (see chart below). That is roughly consistent with what economywide remittances of tax withholding have been telling us: daily tax withholding amounts, which we have adjusted to remove the estimated effects of tax law changes since March and to standardize the number and makeup of business days across months, were down by 2.0 percent in September, as we posted five days ago. We estimate that tax withholding was more than 7 percent below year-ago levels in April. Through the downturn and gradual recovery, withholding growth has been roughly tracking economywide wages and salaries as measured by BLS.
