US wage increases have remained weak despite the apparent improvement in labour market demand implied by the unemployment rate

John Robertson

PortfolioDirect

US wage increases have remained weak despite the apparent improvement in labour market demand implied by the unemployment rate. The chart (for US private sector production and nonsupervisory employees) offers a 50 year perspective on what has been happening. Friday's US labour market report for April offered some better than expected gains on employment and a further reduction in unemployment. The unemployment rate reduction has important policy making implications but, ultimately, wage pressures dictate whether inflation reappears (and the need for a policy adjustment). Unemployment rates are a relatively simple proxy. The long term chart also highlights the impact on labour prices of occasionally cataclysmic changes in macroeconomic conditions such as occurred in the early 1980s and again after 2008.


2 topics

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.