Compensation of Employees revisited

A recent post wondered why compensation of employees isn’t increasing in the national accounts.  The CSO have now published the Q3 2015 update of the non-financial sectoral accounts and the question seems moot – primarily because of data revisions.

In the chart above there is now a two-year upward trend which was not evident in the last version of the data.  All of the revisions relate to data before the first quarter of 2014 so it is possible the changes are result of the switch to ESA2010. 

Anyway now that we have what we would expect – rising compensation of employees – it is worth looking at the broader household sector accounts.  Click to enlarge.

For the first three quarters of 2015, gross disposable income is almost €6 billion (9.2%) higher than in the equivalent period of 2014.  This is driven by three key factors:

• a €3.5 billion rise in self-employed and mixed income
• a near €2 billion rise in wages received, and
• a €1 billion improvement in net property income (mainly dividends)

These are partially offset by a rise in social contributions paid (both to the government and financial corporations) and a reduction in social benefits paid by the government.

Although there was a €6 billion increase in gross disposable income the figures show that there has been a €2.5 billion increase in household consumption expenditure.  This means there has been a big jump in gross savings and the household savings rate for the first three quarters of 2015 stands at 12.2% compared to 7.8% in the first three quarters of 2015.