Pedro Nicolaci da Costa: Wage Growth Should Be Much Stronger by Now Given Low Jobless Rates: "There's a simple way to tell the US job market is not as strong as it appears.... 'The definition of full employment is low- and moderate-wage workers actually get raises," said Josh Bivens, director of research at the Economic Policy Institute. 'We are not at full employment yet'...
...Who was it that said doing the same thing and expecting a different result was the definition of insanity? That seems to be the curious path of Federal Reserve policymakers who continue to argue they must keep pushing interest rates higher in earnest because the unemployment rate is so low that it risks generating runaway inflation as workers ask for big pay raises. There's just one missing ingredient: actual wage growth of any substance and duration. The unemployment rate is at 3.9% and average hourly earnings rose 2.9% last month, the strongest since the Great Recession. But that pace of income gains is still paltry compared to past recoveries when a much more robust 4% rate of growth was common. Wages are certainly rising all-too-slowly in relation to the low headline jobless rate, which masks negative factors like depressed labor force participation and widespread underemployment. Plus, that was a single month's reading that was high compared to the recent record...
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