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Conrad DeQuadros ...
  • John Ryding
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Sluggish Wage Growth—Blessing or Curse? What’s Next?

Former Fed Chair Janet Yellen raised the profile of wage growth as a monetary indicator when she put a numerical range of 3%-4% on wage growth in her dashboard of economic indicators and with today’s employment report, average hourly earnings growth has moved into this range for the first time since April 2009. A number of commentators have blamed sluggish wage growth for subdued growth in aggregate demand and sub-par real GDP growth in this recovery. We disagree that modest wage growth has been the factor holding back the recovery. This note draws on work presented in yesterday’s research note Economics Matters, Sluggish Wage Growth Has Been Good for Growth, which in turn draws on our earlier work on profit margins, capital spending and productivity.

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RDQ Economics
RDQ Economics

RDQ Economics provides global macroeconomic consulting services with an emphasis on U.S. economic fundamentals and monetary policy.

Our views are driven by consistent application of classical economic and monetary principles and has generated superior anticipation of changes in the stance of monetary policy and of movements in economic growth and inflation.

The founders of RDQ Economics, John Ryding and Conrad DeQuadros, have a combined experience of 26 years on Wall Street, 12 years of experience in central banking at the Federal Reserve and the Bank of England and nine years in the independent research space. John and Conrad have worked closely with fixed income, foreign exchange, and equity traders and portfolio managers, which has enabled their analysis and advice to be tailored to a clientele that is focused on trading and investment decisions.

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Conrad DeQuadros

John Ryding

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