Right now, economics researchers at the Atlanta Fed are all the rage.
After the Atlanta Fed’s GDPNow tracker nailed the first quarter’s disappointing GDP report, this measure and the work coming out of the Atlanta Fed has gotten increased attention.
Of course, as it should: they were the only ones that saw that coming.
And so while the Fed’s GDP predictions have been a bit of negative news for the economy — currently the Atlanta Fed is tracking for 1.1% GDP growth in Q2, with some on Wall Street looking for growth closer to 3% — wage measures coming out of the Fed are sending decidedly more bullish signals for the economy and the labour market.
Writing on the Atlanta Fed’s Macroblog on Friday (via @TheStalwart), John Robertson notes that the Atlanta Fed’s year-over-year wage measure shows median wage increases of 3.3% in April, up from 3.1% in March and currently at the highest level since March 2009 (when this measure was on the way down during the financial crisis).
This measure is developed using the BLS’ hourly wage data, 12 months apart, and the current population survey, and Robertson notes that this measure tends to closely track the employment cost index.
Over the last several years, Robertson notes that there’s been a strong correlation between the employment rate and the growth in wages.
“At least in terms of this measure of wage growth, it seems that improvement in labour utilization is translating into rising wage growth. This development is something our boss, Atlanta Fed President Dennis Lockhart, has been looking for.”
The next update from the Atlanta Fed is in a few weeks. Stay tuned.