It might not have been the year-end bonus you expected, as Southern California pay raises dipped to a one-year low as 2016 ended.
The Employment Cost Index for the five-county region showed wages and salaries growing at a 3.1 annual pace in December, down from 3.8 percent in September but up from 2.7 percent at 2015’s end. Pay hikes reached their 2016 peak in June, rising at a 4 percent annual rate.
Smaller pay raises may be tied to bosses’ year-end jitters with a new White House administration bringing uncertainty to economic policy. The fast pace of hiring slowed, too, as an example.
December job counts grew in Los Angeles County at 1.3 percent annual rate, the smallest increase since January 2015. Orange County bosses added jobs at a 2 percent rate, lowest since June 2014. The Inland Empire growth was 2.9 percent – well off the peak of 5.4 percent in December 2014.
Raises beat inflation as wage growth topped the local Consumer Price Index, which rose 1.9 percent last year. And December’s 3.1 percent regional pay jump topped any quarterly increase in 2012 through 2014.
Local raises are still good from a national perspective, beating the U.S. pay-hike pace of 2.3 percent in December, down from 2.4 percent in September – but up from 2.1 percent in December 2015.
However, fourth-quarter results marked the first time in 2016 that Southern California pay raises did not lead the 15 major U.S. markets broken out by these federal stats. For December, SoCal ranked fifth behind Atlanta (up 4.2 percent), Seattle (3.7 percent), Miami (3.6 percent) and New York (3.3 percent).
With President Donald Trump now at the helm, it will be interesting to see how bosses react. Employment trends – job counts and wages – will be an early indicator of corporate buy-in with the new administration’s self-described pro-business policies.
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