Slow Wage Growth is Certainly Not a Sign of the “Some Further Improvement” Needed for the Fed to Raise Rates

Arguably, the most important measure for the Federal Reserve as they decide whether to raise rates in September is nominal average hourly earnings. Over the year, average hourly earnings rose only 2.1 percent, in line with the same slow growth we’ve seen for the last six years. And wages for production/nonsupervisory workers rose even more slowly, at 1.8 percent over the year. The annual growth rates are slow by any measure, but are certainly far below any reasonable wage target.
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