I'm impressed with the pop in GDP. The haves are doing quite well. The have nots? Not so well.
Median Real wages rose 6% from 2014 Q2 to 2017 Q1. From 2017 Q1 to 2018 Q2 real wages are flat (actually down a tic) For those unfamiliar with the term, median wages are not even the "have nots". That is the dead middle of the working population. My hunch is that as you go down the income scale it gets worse, not better.
Perhaps there is a lag in real earnings for the working folks? First GDP pops and a year later we start seeing the economic benefits to the working class. But not yet anyway. Look, I'm not a socialist. I will state categorically that socialism is NOT good for the worker based on the historical evidence. But I wouldn't be doing cartwheels about the GDP if real wages aren't rising.
Ya think? Did ever consider all the new workers we have welcomed into the economy and what wage these new workers start at? Usually a new worker starts out with a entry level wage and what magically happens? Right they work their way up to higher and higher levels....but some people would rather twist and turn numbers because of TDS, somehow it makes them feel better.
Employment and wages tend to be a trailing indicator. Looking at the Fred chart, you'll note that without fail, in the shaded areas, indicating a period of recession, real wages increased. There are a few reasons, but most significant is that the real wages include actively employed workers, and lower paid workers are the first to go during slowdowns. This will result in an "artificial" increase in real wages.
They tend to get rehired during economic growth and tend to depress wage growth in spite of the fact that their higher paid cohorts are making more.
As growth continues and the low skilled labor force tightens, wage pressure begins to affect all levels and true wage growth begins.
We've been in a long term recovery, certainly the longest of my lifetime. It's also been the most sluggish. There is still a well of untapped low skilled workers but it almost has to be shrinking to levels where it will stop being a factor.
Early Fed GDP forecasts for Q3:18 are in the low to mid 4% range. Consecutive Qtr's in excess of 4% GDP. You have to go back to before the "Great Recession" to see that.
All the data I look at, and there is quite a bit, indicates we are already starting to see wage pressure as the labor market tightens. Baring an economic reversal, we'll be seeing acceleration in wage growth over the next 12 months and probably beyond.
*Edit Note: I'd have replied earlier, but I had to think long and hard to keep it in "TR" mode. Not always easy for me in these areas but I think I managed.
Wages are increasing for labor here in Cincinnati area.
2 years ago radio advertisement for Warehouse labor $12.00/ hour Now advertisements for $14-16
2 years ago radio advertisement forClass A Drivers $16.00/ hour Now advertisements for $20+with sign in bonus
The 6 guys that work for me $2.37 increase in that time.
AK Steel now advertising for lots of positions. Lowest entry level $19 /hour most higher.