If you needed a reminder of just how bad the economy still is, then you got it this morning. According to the Bureau of Labor Statistics, the average hourly compensation of nonfarm workers fell on an annualized basis in the first quarter by 3.8%. As the official press release noted (emphasis added), "The decline in the hourly compensation is the largest in the series, which beings in 1947."
The chart below illustrates the quarterly changes in wages since the beginning of 2005. As you can see, on a non-annualized basis, wages fell by 1.33%, roughly in line with the second quarters of 2008 and 2011. As a side note, the historic 3.8% figure is arrived at by projecting the first-quarter decline over the remainder of the year.
These results, combined with a worse-than-expected report on private-sector job gains, go a long way toward explaining why stocks were broadly lower today -- the Dow Jones Industrial Average (^DJI -0.98%) and the S&P 500 (^GSPC -0.46%) tumbled.
On a slightly more upbeat note, Hovnanian Enterprises (HOV -1.51%), one of the nation's largest homebuilders, reported fiscal second-quarter earnings. For the three months ended April 30, the company made $1.3 million on $423 million in revenue. While the former figure was slightly smaller than the same quarter last year due to a $27 million gain related to the extinguishment of debt, the top-line revenue figure expanded by an impressive 24%.
