What with the Fed’s Open Market Committee meeting next week and given that there’s been a bit of press around some acceleration in wage growth, allow me to share an index* of three wage series: the hourly wage rate of blue-collar, non-managerial workers; the median weekly earnings of full-time workers, and average hourly compensation.
Source: BLS, see text.
I’m working on a longer piece that references this amalgamated series, so I wanted to post it, but the punchline is there’s no wage pressure to speak of. Some series—interestingly, those of middle and lower wage workers—have accelerated a bit in recent months, and that’s good! Others, like the overall average hour wage, average hourly compensation, and the Employment Cost Index (also an all-in compensation measure), have not, as shown in this next figure (hourly comp is especially noisy).
And most importantly, both actual (i.e., core PCE—the Fed preferred measure) and expected inflation, remain below the Fed’s 2% target. Actual inflation, in anything, has decelerated in recent months.
*First principal component of the yr/yr changes in the three series.