Here’s something that we haven’t seen at all during the crisis aftermath: accelerating wage growth.
But check this out. If you look at a year-over-year chart of private sector average hourly wages, you can finally see the first real signs of accelerating wages.
Here, let’s zoom in a little more.
Here’s the same measure — year-over-year change in average hourly wages — going back just to 2007.
There have been some bumps up along the way, but yes, it really looks like for the first time since the recession, we’re seeing a sustained period of wage growth.
This will be a big trend to watch. For one thing, it’s great for workers and spending etc.
It also has implications for margins and the Fed, which will start to feel an itch in its finger, the longer this trend is sustained. Accelerating wage growth, and an unemployment rate that’s ticking higher. Expect the “Fexit” (Fexit) talk to pick up.
UPDATE: And right on cue, @jesse_livermore on Twitter posts this great chart showing year-over-year hourly wage growth vs. the Fed Funds rate (the Fed’s main policy tool), which suggests that indeed an acceleration in wage growth would likely make the Fed think more about winding down its extraordinary actions.
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