December's employment report showed that the average hourly wage has risen by 2.9 percent over the last year. This was widely reported as evidence that wage growth was accelerating. While the pace of wage growth may have picked up somewhat in recent months, it is not necessarily the case that the pace of compensation growth has risen to the same extent.

In recent years, the pace of benefit growth has been trailing the rate of wage growth, as employers cut back on the amount they pay for their workers' health insurance. As a result, at least through the third quarter of the 2016 (4th quarter data are not yet available), the acceleration in compensation growth was less noticeable than the acceleration recently reported in wage growth. The year-over-year increase for the third quarter was 2.4 percent. This is up by roughly a percentage point from the lows hit in 2009, but down from 2.6 percent year-over-year pace in the fourth quarter of 2014.