Wage Growth May Signal Inflation Ahead—and Fed Action
Higher pay could speed the end of zero-percent interest rates
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Barely visible in December’s middling jobs report was a tiny ray of light: Hourly wage increases for a majority of U.S. workers are starting to accelerate after four years of steady decline. In December 2008, hourly earnings for production and nonsupervisory workers were growing at 4 percent a year. Wage growth slid to 1.3 percent by July 2012 and flat-lined for most of the fall. In December it jumped 1.7 percent. That might not sound like much, but it’s the biggest monthly gain since the recovery began.