Real wages are rising at last

The jobs report this morning was good, with 321,000 net new jobs in November. Economists were forecasting about 100,000 fewer.

Equally, and perhaps more interesting was the news that average hourly earnings grew 2.1% year-over-year. (In November of 2013 wages only grew 0.9% yoy.) You will note that wages in Japan are also growing an a good clip. (Not so in the UK.)

Faster wage growth is understandable because although the overall unemployment rate is at 5.8%, the unemployment rate of whites is 4.9% and of Asians is 4.8%, so whites and Asians are close to full employment, which means wages should rise. Rising wages will be tempered, however, by the 6.9 million involuntarily part-time workers plus the discouraged workers.

The FT reported this morning that real wages in the developed world rose only 0.1% in 2012 and 0.2% in 2013, so what we are seeing in Japan and the US represents an important change, I should think.

So wages are finally rising again. Maybe were are beginning to exit this long period declining/stagnant household income, and, at long last, consumption binging can resume. Let us hope for this good result.