Little or no change in the pace of annual wage increases in the private sector is expected in the coming months, according to the preliminary fourth quarter Wage Trend Indicator (WTI) released today by Bloomberg BNA, a leading publisher of specialized news and information.

The index edged down to 98.47 (second quarter 1976 = 100) from 98.52 in the third quarter. If confirmed by the revised and final fourth quarter readings, the decline would be the second in a row. Over the past five quarters, the WTI has fluctuated within a narrow range from 98.40 to 98.67.

"The latest WTI suggests that wage growth is still in a holding pattern," economist Kathryn Kobe, a consultant who maintains and helped develop Bloomberg BNA's WTI database, said. "The labor market has been moving in the right direction, but there is a lot of uncertainty over efforts to avoid the fiscal cliff, which would send the economy into a tailspin," Kobe said.

Kobe said she expects little or no change in annual wage gains in the private sector from the 1.8 percent increase over the year ended in the third quarter, as measured by the Department of Labor's employment cost index (ECI). The WTI does not forecast the magnitude of wage growth, only the direction.

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 increase in the WTI forecasts greater pressure to raise private sector wages, while a sustained decline is predictive of a deceleration in the rate of wage increases.

Reflecting mixed economic conditions, two of the WTI's seven components made negative contributions to the preliminary fourth quarter reading that outweighed three positive factors, while two components were neutral.