---
title: Noooo! GDP Slowed in Fourth Quarter. And That's Not Even the Worst Part
description: While the U.S. recovery continued in the fourth quarter, wages didn't grow as fast as many economists were hoping.
authors:
  - name: Ian Salisbury
    role: Senior Editor
    url: https://money.com/author/ian-salisbury-2/
    bio: Ian Salisbury was a senior editor at Money, focusing on investing, banks and mortgage.
    at_money_since: 2013
    articles: 91
    covers:
      - Economy and Politics
      - Housing
      - Investing
      - Lifestyle
      - Loans
      - Mortgages
      - Personal Finance
      - Retirement
      - Shopping
      - Taxes
    former_staff: true
published: '2015-01-30T16:25:27.000Z'
modified: '2024-05-16T10:06:36.000Z'
section: Economy and Politics
tags:
  - Economic Growth
  - Economy
  - employment cost index
  - Federal Reserve
  - GDP
  - Jobs
  - wage growth
  - Wages
word_count: 203
canonical: https://money.com/wage-and-gdp-growth-slow/
type: Article
source: structured-blocks
---

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![150130_INV_LowWageGrowth](https://img.money.com/2015/01/150130_inv_lowwagegrowth.jpg)

Economists got a fresh read on the U.S. recovery today: The federal government reported fourth-quarter gross domestic product growth slowed to 2.6% from the third-quarter's 5%.

The good news is few economists expected the economy to outstrip the third-quarter's robust number. The bad news is slower GDP growth wasn't the only disappointment. In fact, many experts were looking past that headline number at something else: the Employment Cost Index.

The Labor Department index, a measure of overall employment costs, including wages but also benefits like health care, rose 2.2% year over year for the fourth quarter. It had grown 2.3% in the fourth quarter, and economists had been hoping that it would meet or exceed that mark.

That it failed to do so suggests wage growth—largely seen as the last missing piece of the recovery—still hasn't picked up as much as we would all like. The upshot is that, while Americans seem to be able to find work, solid middle class jobs are still disturbingly scarce. Sluggish wage growth also means the Federal Reserve, which is feeling pressure to raise interest rates, may have extra breathing room, since rising wages are a key driver of inflation.

Here's the wage growth trend line, fyi:

![ECI](https://img.money.com/2015/01/eci.jpg?quality=85)

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