Great Economic News: Real Wages Fall

Hey all. There's great news. Your incomes are falling. Jump for joy at our great economy.

The strong gain in productivity, coupled with a sharp downward revision to second-quarter compensation measures, eased inflation worries on Wall Street, boosting prices for stocks and U.S. government bonds.

The Labor Department said compensation in the second quarter advanced only 0.9 percent, the smallest gain since the final three months of 2002 and well below the 4 percent rise reported just a month ago. The slim pay gain means unit labor costs fell in the quarter, as opposed to rising.

Meanwhile, the cost of living increased by more than the increase in compensation, so real pay per hour fell.