There are an infinite number of trends for Mr. Market to consider, and here’s one more: wages are rising at a pace considerably faster than inflation. In fact, the trend has been around for a while. The question: what does it mean?
But first, the numbers. The Labor Department last week reported that average weekly earnings rose 4.5% in December on a seasonally adjusted basis–more than twice the inflation rate of 2.0% over the past year, as reported in November.
The rate of increase in wages is hardly new. Courtesy of number-crunching from NoSpinForecast.com, it’s clear that the 12-month rate of change in earnings has been moving skyward for some time. Indeed, the last time that wages were growing a more than 4% annually was in the late-1990s.