The US economy might finally be getting itself together.
Six years after the financial crisis, net job growth is solidly above 200,000 per month, the unemployment rate is down below 6%, and wage growth is finally starting to show up.
Earlier today, Deutsche Bank’s Torsten Slok sent out this chart (right), which shows job growth by level of wages. Here’s what he has to say: “…over the past year we have seen a significant acceleration in the number of medium-wage jobs created. The bottom line is that the labour market continues to tighten and it is not a surprise that we are beginning to see wage pressure…”
In addition to that, wages for the lowest paid workers (the bottom 10th percentile) are edging up. From a Bloomberg report on wage gains:
As Conor Sen points out on Twitter, wage growth at the lowest end of the income spectrum, it doesn’t add to overall measures of wage growth much, but it does really help those workers seeing a little bit of extra money in their pockets.
When $US10/hr workers get a big raise it’s understated in aggregate measures of wage growth, but the multiplier is huge for those workers.
— Conor Sen (@conorsen) November 24, 2014
But we’re not quite to fully healthy yet. There’s one reason to continue to despair: The number of people who are long-term unemployed is still way higher than it should be.