Wage growth is close to not being growth at all.
On August 1, we’ll get the latest jobs report from the Bureau of Labour Statistics. Last month, the report showed that the economy added 288,000 jobs in June, with wages growing 2% year of year.
Unfortunately, when taking into account the rate of inflation, “real” wage growth was flat.
In Business Insider’s latest Most Important Charts In The World feature, Ellen Zentner, senior U.S. economist at Morgan Stanley, highlighted the following chart, which shows how real wage growth has slowed to, well, no growth at all.
Wage growth cratered following the financial crisis, and as Zentner notes, it has remained at around a meager 1.5% to 2.25% rate since that time.
Inflation, however, has also lagged, and as a result, real wage growth — however modestly — has still existed.
Over the first half of this year, however, inflation in the U.S. has picked up, running at about a 2% annualized rate the last few months.
If inflation begins to increase faster than wages, U.S. workers could again find their inflation-adjusted pay falling.