For years after the 2008 financial crisis, growth in average hourly earnings stayed low, hovering at around 2% year over year.
This was most likely not high enough to support the Fed’s stated inflation target of 2% year-over-year.
However, 2016 saw wages climb at a somewhat faster rate, with average hourly earnings growing in a range of 2.2% to 2.6% year-over-year, hitting a post-recession high of 2.9% in December.
According to the January jobs report, average hourly earnings grew by 2.5%, falling 0.4 percentage points from the previous month and sitting well below the Bloomberg economists’ consensus expectation of 2.8%.
