The economics world is becoming ever more puzzled by the sluggishness with which American wages have been rising during the current economic recovery despite very low rates of official unemployment. Judging by the new June inflation-adjusted wage figures released today by the Labor Department, all the usual suspects are going to be wondering about wages lag for some time to come.
The new data left unrevised both the finalized (for now), April figures, and the still preliminary May results.
For the former, constant dollar wages were flat month-to-month and up 0.28 percent year-on-year, and for the latter, they increased by 0.28 percent on month and 0.56 percent on year.
The June numbers? In the same neighborhood, with a monthly advance of 0.19 percent and a yearly improvement of 0.84 percent. For some context, real private sector wages increased nearly twice as fast between the previous Junes – by 1.62 percent.
Manufacturing, once the economy’s wages leader, kept its recent laggard status. Its (now final) April and (still preliminary) May results were unrevised, too – which in this case contained some good news. The former monthly increase of 0.55 percent, the best since August, 2015’s 0.66 percent, stayed intact. So did the annual increase – which was identical. At the same time, May’s 0.28 percent monthly decline is still on the books, too, as was the year-on-year change – which was zero.
As with after-inflation wages in the private sector overall, after-inflation manufacturing wages performed slightly better in June. They inched up by 0.09 percent on month and rose 0.37 percent on year. But the latest annual increase was much slower than that between June, 2015 and June, 2016 – 1.32 percent.
And nothing makes clearer the long-time stagnation of overall private sector and manufacturing wages than seeing their inflation-adjusted change during the economic recovery – which marked its eighth birthday last month. For the private sector, they’re up a total of 4.46 percent. For the manufacturing sector, the rate has been less than a third as fast – 1.32 percent. Which raises the question, “What comes first: the end of the recovery or the end of wage stagnation?