Annual wage gains in the private sector are on track to improve in the coming months, according to the revised fourth quarter Wage Trend Indicator (WTI) released today by BNA, a leading publisher of specialized news and information.

The WTI climbed to 98.48 (second quarter 1976 = 100) from 98.36 in the third quarter. If confirmed by the final fourth quarter readings, it would be the sixth consecutive increase in the forward-looking index.

"Right now, both the economy and the labor picture seem to be improving somewhat," economist Kathryn Kobe, a consultant who maintains and helped develop BNA's WTI database, said. "There are still a lot of unknowns, however, the big one being the unsettled European debt situation," Kobe added.

Even with the anticipated pickup in wage growth, annual gains for private sector workers as a whole are not expected to exceed 2.0 percent. In the third quarter, the most recent data available show wages and salaries grew 1.7 percent year-over-year, as measured by the Department of Labor's employment cost index (ECI).

Reflecting recent labor market conditions, four of the WTI's seven components made positive contributions to the revised fourth quarter reading, while three factors were negative.

Over its history, the WTI has predicted a turning point in wage trends six to nine months before the trends are apparent in the ECI. A sustained decline in the WTI is predictive of a deceleration in the rate of private sector wage increases, while a sustained increase forecasts greater pressure to raise wages.